RESIDENCY REQUIREMENTS FOR CANADIAN CITIZENS
@bisonravi. Thank you for the document. It is of course just a form to fill in when Canadians leave the county (like a lot of other countries have). But it mentions the underlying regulations. I did some digging.
Here is what I came up with...
There is absolutely NO doubt that in order to be able to stop paying taxes in Canada one must cut all residency ties in Canada and proof permanent residency a new jurisdiction. You will need a new home and a residents permit (although other factors measure in as well).
It becomes interesting when you are away for more than 2 years. You now become a non tax-resident emigrant:
Generally, you are an emigrant for income tax purposes if:
*you leave Canada to live in another country; and*
*you sever your residential ties with Canada.*
Severing your residential ties with Canada means that you do not keep your main ties with Canada. This could be your case if:
*you dispose of or give up your home in Canada and establish a permanent home in another country;*
*your spouse or common-law partner or dependants leave Canada; and*
*you dispose of personal property and break social ties in Canada, and acquire or establish them in another country.*
Now, after you have become an immigrant, you no longer even have to file tax returns in Canada (unless you have Canadian sourced income).
The original statement (@blueblueocean) was that courts upheld that everyone must be resident somewhere and therefore must have a country where he has a residents permit. It seems pretty clear. But there is one question: how is residency defined?
The problem is that it is not defined in the law. But the subject has come up in the supreme court.
This is from McFadyen v. The Queen (but they cite Thomson v. Minister of National Revenue).
"For the purpose of income tax legislation, it must be assumed that every person has at all times a residence. It is not necessary to this that he should have a home or a particular place of abode or even a shelter. He may sleep in the open. It is important only to ascertain the spatial bounds within he spends his life or to which his ordered or customary living is related. Ordinary residence can best be appreciated by considering its antithesis, occasional or casual or deviatory residence. The latter would seem clearly to be not only temporary in time and exceptional in circumstances, but also accompanied by a sense of transitoriness and of return.
But in the different situations of so-called "permanent residence", "temporary residence", "ordinary residence", "principal residence" and the like, the adjectives do not affect the fact that there is in all cases residence; and that quality is chiefly a matter of the degree to which a person in mind and fact settles into or maintains or centralizes his ordinary mode of living with its accessories in social relations, interests and conveniences at or in the place in question. It may be limited in time from the outset, or it may be indefinite, or so far as it is thought of, unlimited. On the lower level, the expressions involving residence should be distinguished, as I think they are in ordinary speech, from the field of "stay" or "visit"."
What are they saying? You do not necessarily need to have a home or a residence permit in order to have residency somewhere. They just state that for income tax legislation some sort of a residence MUST be determined. (it is like 1 + x = ... - you can not solve that formula).
So I do not see how as a Canadian Citizen that is considered an emigrant and non-tax resident is required to be a formal resident (residence permit) in a different jurisdiction. Meaning that the original statement would be false.
However, having a residence permit and a permanent home will make his case much clearer and stronger if he ever runs into a dispute. In addition I would like to emphasize, that he really has to have cut all ties with Canada. Even things like social relations, maintaining a bank account and spending to much holidays at home could open the door to discussion when ones residency is not clearly defined.
Having said that, as a Canadian you already have proven to the government that you lived somewhere else for two years.
Surely, they will understand that you are no longer their milking cow by then...