Canadian in Brazil - David Ingram

    Hi Gillian,
    here i am in brazil, enjoying myself very much. i have applied for a
    permanant visa based on the investor program here in brazil, which
    allows me to apply for a permanant visa for an investment of $50,000.
    now, a bit late, i guess i should do my homework. do i still have a
    credit with david? i believe i do, and i would like to use it to ask
    the questions listed below. i have not sent him a copy of the
    message at this time. if you believe i am entitled to the
    information, please forward a copy to David.
    1) what happens to my canadian citizenship if i take out a permanant
    visa in Brazil. (or who should i direct this question to?) i have
    rental property and investments (rrsp´s) in canada. i do not wish to
    give up my canadian citizenship.
    2) my understanding is that there is a rule in canada, stating that
    i have to be in canada 6 months plus one day per year, (not sure
    where i got that info)
    3) my understanding is that canada and brazil have a tax treaty,
    meaning i only get taxed by the country where i earn the charge for the chuckle my ignorance must be giving
    4) to apply for a permanant visa in brazil i have had to form a
    limited company. i will be investing my $50,000 in a house which
    will be used to rent to tourists. the visa has an initial term of 5
    years, after which i would have to prove that i am earning income,
    or hiring workers etc.
    5) am i crazy?...maybe you can refer me to someone with an answer to
    that question...(again, haha) this country is beautiful, the real
    estate prices are excellent. i would be happy to stay here, but i
    know i have to be practical. i believe that brazil has a bright
    future, and feel i am getting in close to the ground floor of
    opportunities. the area i am in is the state of xxxxxxxx, which is one
    (province) of brazil.
    6) can you provide any suggestions of links for me to get
    information, i have written to the consulate etc.
    7) there may be a question that i have missed in asking you
    regarding what i am doing, please provide any general or specific
    information for a person such as myself who wishes to spend time and
    invest money in brazil. i realize i will have to get the brazilian
    information here, but i mean what i need to know regarding taxes and
    citizenship in canada.
    thank you for any help you can provide.
david ingram replies:
1.	Unless you renounce your Canadian citizenship, you will remain a Canadian
1(a)	You may be referring to Canadian residency.  If you are leaving Canada
to live in Brazil, you must file Forms T1161 and likely T1243 and T1244 to
calculate any accrued Capital gains on your Canadian property.  For
instance, any increase in value of the Hedley property becomes taxable but
you do not need to pay the tax as you leave as it is real estate and there
are withholding taxes in Canada if you sell it as a non-resident.
2.	The six months plus one day means that you can keep your BC medical (Now
BC Health) alive.
If you are here six months plus a day, you do NOT need to file the forms I
mentioned above.
3.	Article IV of the Canada Brazil Tax Treaty determines where you pay tax
on your world income.  If you are in Canada six months plus one day you will
have to report the Canadian income AND the Brazilian Income on your Canadian
return.  You would report the Brazilian income on your Brazilian return and
if you had to pay any tax to Brazil, you would claim it as a foreign tax
credit on lines 431 and 433 of your Canadian Tax return AND your BC Medical
would remain active.
4.	If you are in Canada six months plus a day, the Brazilian Corporation
also has to file a Canadian Corporation return (after filing in Brazil) as
its mind and control is in Canada BUT you get to keep your BC Medical alive.
5.	Yes, you are crazy.
6.	You might want to read the tax treaty which I have attached to this
email.  If the attachment does not work, you can get at it yourself and have
it downloaded from the CRA at:
After the treaty, the world wide web is your buffet.
7.	I think I am into your consultation for about an hour and 50 minutes so
far between the time while I was on the road, your follow-up after and now
almost another hour. The taxation and citizenship questions have been
Good Luck
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week  Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at <mailto:taxman at> <>
Disclaimer:  This question has been answered without detailed information or
consultation and is to be regarded only as general comment.   Nothing in
this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance, preparation, or
consultation  in connection with personal or business affairs such as at <> . If you forward this message, this
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