French citizen in Canada - Ask a cross-border

I am a retired French citizen, receiving a retirement pension from
France. I have purchased property in Canada (under the name of my son
who is a Canadian citizen), having transferred a significant amount of
money from France without any paperwork, and I alternate living in
France and Canada. This year, I have stayed 4 months in Canada,
returned to France for 1 month and then returned to Canada for 2
months more before returning to France. A total of approximately 6
cumulative, but not consecutive months. Actually, I may be short of 6
months by a few days. I will be doing this in a similar fashion each
year. Once or twice, I have visited the US and have had my passport
stamped so that I am not too long in Canada on a consecutive basis.
Actually, I am in Canada as if I were on a visiting basis only. There
is no visa or resident paperwork.
1. Do I have to file an income tax declaration in Canada? My only
income is my French
2. Should I have declared the transfer of funds from France to Canada?
If so, should
    this have been done in France or in Canada or both countries?
3. Am I here in Canada illegally?
4. Would it have made any difference if I had bought the Canadian
property in my own
5. What must I do to rectify any illegalities?
6. Can you help me with any necessary paperwork?
david ingram replies:
This question is from last November and was put in the "would like to
answer when I have time pile".
1.    If you are not in Canada more than 183 days within a calendar
year and you have no income from Canada, Article IV of the Canada /
France Income Tax Convention would only make you taxable in Canada
because of IV(2)( d) below.
Article IV-2
 2.     Where by reason of the provisions of paragraph 1 an individual
is a resident of both Contracting States, then his status shall be
determined as follows:
  (a) he shall be deemed to be a resident of the State in which he has
a permanent home available to him; if he has a permanent home
available to him in both States, he shall be deemed to be a resident
of the State with which his personal and economic relations are closer
(centre of vital interests);
  (b) if the State in which he has his centre of vital interests
cannot be determined, or if he has not a permanent home available to
him in either State, he shall be deemed to be a resident of the State
in which he has an habitual abode;
  (c) if he has an habitual abode in both States or in neither of
them, he shall be deemed to be a resident of the State of which he is
a national;
  (d) if he is a national of both States or of neither of them, the
competent authorities of the Contracting States shall settle the
question by mutual agreement.
3.     Where by reason of the provisions of paragraph 1 a person other
than an individual is a resident of both Contracting States, the
competent authorities of the Contracting States shall endeavour to
settle the question by mutual agreement. In the absence of such
agreement, such person shall not be considered to be a resident of
either Contracting State for the purposes of enjoying benefits under
the Convention.
2.    If you brought the money in your duffle bag in cash, you should
have reported the cash transfer to FINTRAC on Canadian Form E667.  If
you transferred the money electronically from French Bank to Canadian
Bank, then the bank would have filled out E677 and you do not need to
report yourself.  You can see the forms below:
E667 is filled out by yourself and E677 is filled out by the financial
3.    As described, you are not in the country illegally.  The
individual Immigration Officer at the Canadian border has the right to
restrict the amount of time you are allowed to enter Canada.  If you
are given 6 months, you may remain for up to six months. Tax law is
different.  If you are here for more than 183 days, Canada can tax or
attempt to tax you.  Realize that Article IV will prevail.
Do be aware though that Canada feels that if you are claiming an
exemption, you better be IN YOUR HOME COUNTRY more than 183 days.  If
you were in Canada for 5 months, the US for four months and France for
3 months and owned a house her (through your son) and were ducking in
and out of Canada through the US and not going home to France, Canada
could tax you in my opinion. You would be habituating yourself to
Canada and North America.
In fact, if you are in the US for more than 123 days a year for three
years in a row, you are also liable for US income tax - see  the April
1994 Newsletter at top left hand corner at
4.    If the property is being held in trust for you by your son, it
does not make any difference.  If the property is absolutely your
son's property and if sold, he would get the money, than it could /
should / would make a difference.
5.    I do not see any illegalities from what you have said.
6.    YES!.  Even though I suggested that you do not need to file a
return, I would file one if I were you.  In the last months we have a
dozen people like yourself who have come to the attention of the CRA
and are suddenly being asked to file back as far as 19"8"9.  That is a
hard thing to live with.
If you file, you get your answer now and the CRA can only ask to look
at three years of back taxes. If you do not file, the CRA can ask for
back taxes for as many years as they wish.  In the case of one lady
client (initial C) who came to Canada in 2002 and failed to file for
that year (when she should have as she was working), the CRA has asked
for Canadian Taxes back to 1998.
In the case of "C" and yesterday's "M", they both filed perfect US tax
returns because they were paid and all their money came from the USA.
They "thought" they had fulfilled their obligations.  However, C owes
Canada $6,000 and M owes Canada $9,000.
I would be glad to file your Canadian back returns for you.
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