[taxationsucks]

Hi everyone,

I am a Canadian citizen. Non-resident of Canada (zero ties). I am a resident (not citizen) in a country that has no income tax at all. I do not pay income tax to either country.

I have a bit of money in stocks, in a third country. I am not a citizen or resident of that country.

I have not been back to Canada in years and have no plan on returning to live there. I might go back to visit for a week, that's about it.

Based on the scenario above, do you think I would have to declare or pay any taxes at all in the future e.g. the stocks?

thanks in advance

 

[Nerd Investor]

You'll probably have to pay some kind of income tax on your investment income to that third country where your investments are held (unless that country also has no income tax).
Generally this would be paid via a non-resident withholding tax.

 

[Eclectic12]

+1.

I would add a bit more detail in that if it is some sort of tax deferred account like the RRSP, the withholding tax may be more broadly applied.

For example, if the stocks were held in an RRSP in Canada, as I understand it - selling the stock in the RRSP is not taxable while withdrawing the proceeds $$$ will be taxable at NR withholding tax. (I believe it is 25%, where a tax treaty may reduce this.)


Where the account is taxable (again using Canada as the example), dividends paid while holding the stock would be subject to the NR withholding tax but proceeds from selling then withdrawing would not be.


At the end of the day, where one is sure one is not a Canadian tax resident - the potential source of tax seems to be the third country. How it deals with NR will set the taxable transactions, the tax rate and the possibilities for any reductions through tax treaties.


Cheers