Process of Exiting Canada to Achieve 0% Tax

Introduction

• Discusses the step-by-step process to become a non-Canadian tax resident to avoid taxes.
• Emphasizes the importance of planning to avoid financial penalties.

Understanding Exit

• Key Concept: Becoming a non-Canadian tax resident rather than just physically leaving.
• Importance of cutting substantial ties with Canada.

Choosing a New Country

• Identify where to establish tax residency.
• Considerations:
  • Countries with 0% tax rates, such as UAE/Dubai.
  • Tax treaties and how they might affect your situation.
• Establish tax residency in at least one other country.

Setting Up in the New Country

• Obtain necessary Visas and residencies.
• Set up bank accounts, local IDs, and other essential registrations.
• Possible professional assistance available for UAE setup.

Selling Assets

• Consider selling assets before leaving Canada to avoid higher taxes.
• Steps:
  • Consult with accountants.
  • Plan the timing of asset sales carefully.
  • Consider being liquid to transfer cash easily.

Cutting Ties with Canada

• Remove as many residential ties as possible.
• Ties to Consider:
  • Real estate ownership.
  • Family left behind.
  • Memberships, licenses, and insurance.
  • Canadian corporations and investments.
• Aim to lower risk of being deemed a Canadian tax resident.

Physically Leaving Canada

• Ensure all Canadian addresses and statuses are updated to nonresident.
• Self-declare the date of becoming a non-resident.

Deemed Disposition/Departure Tax

• Applicable on assets over $25,000.
• Pay unrealized capital gains on net increase of Canadian assets.
• Real estate is exempt from this tax.

Establishing Ties in New Country

• Stay minimum time (e.g., 3 months in UAE) to maintain tax residency.
• Show significant ties to the new country.

Dissolving Canadian Entities

• Consider dissolving companies and transferring assets strategically.
• Some accounts like TFSA or RRSP may be advantageous to keep.

Conclusion

• Encourages seeking professional help for personalized planning.
• Offers contact information for assistance and further resources.