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How Olivier Cantin could pay $0 income tax.
We’ve seen how Lawrence King does it (see attached thread), but he is a UK citizen.
What about a Canadian resident like Olivier?
What about you???
@oliviercantin https://twitter.com/AskForTaxAdvice/status/1298824986229125125?s=20
We’ve seen how Lawrence King does it (see attached thread), but he is a UK citizen.
What about a Canadian resident like Olivier?
What about you???
@oliviercantin https://twitter.com/AskForTaxAdvice/status/1298824986229125125?s=20
First Hurdle: Citizenship Country
Your country of citizenship may tax you on worldwide income, income earned in country, or a mix.
Canada doesn’t care about citizenship for tax – it taxes its residents.
Olivier’s emails says Ottawa so we'll assume he is a resident of Canada.
Your country of citizenship may tax you on worldwide income, income earned in country, or a mix.
Canada doesn’t care about citizenship for tax – it taxes its residents.
Olivier’s emails says Ottawa so we'll assume he is a resident of Canada.
First Hurdle: Resident Country
Canada taxes the worldwide income of its residents so Olivier can’t do what @lawrencekingyo does in Uruguay and just avoid any Canada-sourced income.
As long as he is a resident of Canada he’s got Canada tax on his worldwide income. Bummer.
Canada taxes the worldwide income of its residents so Olivier can’t do what @lawrencekingyo does in Uruguay and just avoid any Canada-sourced income.
As long as he is a resident of Canada he’s got Canada tax on his worldwide income. Bummer.
First Hurdle: Resident Country
Olivier can remain a citizen a Canada, but he needs to break that tax residency.
How to break Canada tax residency… it's not all poutine and maple syrup, but it's doable.
Olivier can remain a citizen a Canada, but he needs to break that tax residency.
How to break Canada tax residency… it's not all poutine and maple syrup, but it's doable.
Breaking Canada tax residency
Canada doesn’t specifically define what a resident is… What??
Tax law can be surprisingly murky people!
…so if you are currently a resident like Olivier, you have the burden of proof in becoming a non-resident.
Here’s what should work…
Canada doesn’t specifically define what a resident is… What??
Tax law can be surprisingly murky people!
…so if you are currently a resident like Olivier, you have the burden of proof in becoming a non-resident.
Here’s what should work…
Breaking Canada tax residency
These are the must haves to break residency:
1)Move out of Canada. Rent/own a home in a different country and stop living in your Canada home.
2)Spouse/dependents have to move, too.
Easy enough right? Make a home outside of Canada.
These are the must haves to break residency:
1)Move out of Canada. Rent/own a home in a different country and stop living in your Canada home.
2)Spouse/dependents have to move, too.
Easy enough right? Make a home outside of Canada.
Breaking Canada tax residency
Change as many of these as possible to your new country:
1)Driver’s license
2)Health Insurance
3)Bank Accounts
4)Vehicles (bring your snowmobile Olie!)
5)Other property
Basically, don't keep a foot in Canada when you move.
Move your life.
Change as many of these as possible to your new country:
1)Driver’s license
2)Health Insurance
3)Bank Accounts
4)Vehicles (bring your snowmobile Olie!)
5)Other property
Basically, don't keep a foot in Canada when you move.
Move your life.
Breaking Canada tax residency
Then what? Hope?
No, after you are gone, you want some certainty that you aren’t a tax resident anymore.
File a Form NR73 when you leave so the CRA can officially determine residency or file as a non-resident on your next tax return (and hope).
Then what? Hope?
No, after you are gone, you want some certainty that you aren’t a tax resident anymore.
File a Form NR73 when you leave so the CRA can officially determine residency or file as a non-resident on your next tax return (and hope).
Breaking Canada tax residency – Departure tax.
More? Seriously??
There is a concept of a departure tax on certain appreciated assets when you leave, but there’s exceptions/ways to defer or avoid it.
Just keep this in mind.
More? Seriously??
There is a concept of a departure tax on certain appreciated assets when you leave, but there’s exceptions/ways to defer or avoid it.
Just keep this in mind.
Breathe… and think about the benefits…
I feel like we need a break here. At least I do.
There’s a bit to breaking tax residency in Canada, but honestly not that hard especially if you don’t have a big family/significant appreciated assets.
I feel like we need a break here. At least I do.
There’s a bit to breaking tax residency in Canada, but honestly not that hard especially if you don’t have a big family/significant appreciated assets.
Breathe…and think about the benefits…
This might be a good time to think about what this gets Olivier, which is avoiding the following:
1) Canada Income Tax: 29%
2) Ottawa Income Tax: 13%
Quite a JV partner that Canada, taking 42% of his profits.
This might be a good time to think about what this gets Olivier, which is avoiding the following:
1) Canada Income Tax: 29%
2) Ottawa Income Tax: 13%
Quite a JV partner that Canada, taking 42% of his profits.
Where to move?
Finally.
So where should Olivier move?
Does he have to join Lawrence in Uruguay? Seems like fun.
There are a lot of options – it just depends on what he wants.
Finally.
So where should Olivier move?
Does he have to join Lawrence in Uruguay? Seems like fun.
There are a lot of options – it just depends on what he wants.
Tax-Free Countries
The Bahamas, BVI, Cayman, Monaco are nice options that have no tax. There are others.
In Uruguay, Lawrence has to make sure he doesn’t do any income producing activity to create Uruguay-sourced income.
This concern doesn't exist in a tax-free country.
The Bahamas, BVI, Cayman, Monaco are nice options that have no tax. There are others.
In Uruguay, Lawrence has to make sure he doesn’t do any income producing activity to create Uruguay-sourced income.
This concern doesn't exist in a tax-free country.
Tax-Free Countries
In these no income tax countries, you don’t have that hoop to jump through…the drawback being the cost of living, as it tends to be higher in tax-free countries.
Lawrence's plan has an advantage here with Uruguay's lower cost of living.
In these no income tax countries, you don’t have that hoop to jump through…the drawback being the cost of living, as it tends to be higher in tax-free countries.
Lawrence's plan has an advantage here with Uruguay's lower cost of living.
Countries with no world-wide income tax
If not a tax-free country, Olivier needs to find a country with that does not tax the worldwide income of its residents: Uruguay, Costa Rica, Panama, Singapore, Hong Kong, Malaysia…and several others.
If not a tax-free country, Olivier needs to find a country with that does not tax the worldwide income of its residents: Uruguay, Costa Rica, Panama, Singapore, Hong Kong, Malaysia…and several others.
Where to now?
From here it's just the Lawrence plan I laid out earlier…
But I'll walk through it for Olivier... https://twitter.com/AskForTaxAdvice/status/1298824986229125125?s=20
From here it's just the Lawrence plan I laid out earlier…
But I'll walk through it for Olivier... https://twitter.com/AskForTaxAdvice/status/1298824986229125125?s=20
Resident Country
Unless a “no-tax” country, Oliver should avoid any economic activity within his new resident country that would give rise to domestic-sourced income in that country.
In general, he should also spend 183 days per year there to maintain residency.
Unless a “no-tax” country, Oliver should avoid any economic activity within his new resident country that would give rise to domestic-sourced income in that country.
In general, he should also spend 183 days per year there to maintain residency.
Resident Country
Does he actually have to have a resident country?
Yes, it's beyond the scope of this thread, but it's best to have a residence for both avoiding taxes in other countries and banking.
Does he actually have to have a resident country?
Yes, it's beyond the scope of this thread, but it's best to have a residence for both avoiding taxes in other countries and banking.
Last Hurdle - Everywhere Else
It would be a bummer to not get taxed in your country of citizenship or country of residence, but end up paying tax somewhere else.
Here’s how Olivier should avoid tax in countries outside of his residence...
It would be a bummer to not get taxed in your country of citizenship or country of residence, but end up paying tax somewhere else.
Here’s how Olivier should avoid tax in countries outside of his residence...
Last Hurdle - Everywhere Else
This is country by country, but in general you don’t want to:
1) Have fixed place of business in country.
2) Have employees/agents working for you in country
You also don’t want to visit for more than 183 days/year and risk tripping residency.
This is country by country, but in general you don’t want to:
1) Have fixed place of business in country.
2) Have employees/agents working for you in country
You also don’t want to visit for more than 183 days/year and risk tripping residency.
In Summary
Olivier, you can get to 0% income tax, from 40%+.
You would have to leave Canada, but it doesn’t mean you can’t ever go back and you can certainly visit.
Uruguay isn’t the only option, but you’ve got at least one friend that could take you to the best steak in town.
Olivier, you can get to 0% income tax, from 40%+.
You would have to leave Canada, but it doesn’t mean you can’t ever go back and you can certainly visit.
Uruguay isn’t the only option, but you’ve got at least one friend that could take you to the best steak in town.
So what about YOU, reader?
Are YOU tired of paying income tax?
Can you find a way to legally avoid it?
Are YOU tired of paying income tax?
Can you find a way to legally avoid it?
Who am I?
First, @oliviercantin did not request this. I just wanted to help out a good guy, and give an example of a Canadian resident getting to $0 income tax.
I’m just a guy who has so much tax planning oozing out of him that I drop random threads on how not to pay it.
First, @oliviercantin did not request this. I just wanted to help out a good guy, and give an example of a Canadian resident getting to $0 income tax.
I’m just a guy who has so much tax planning oozing out of him that I drop random threads on how not to pay it.
Who am I?
I'm Patrick the Money Tweeting Tax Advisor.
I am here to serve and save you cash.
There's no tax question you have that I can't handle.
I regularly tweet tips to save you THOUSANDS in tax every year.
...and of course, DMs are always open. Reach out anytime.
I'm Patrick the Money Tweeting Tax Advisor.
I am here to serve and save you cash.
There's no tax question you have that I can't handle.
I regularly tweet tips to save you THOUSANDS in tax every year.
...and of course, DMs are always open. Reach out anytime.
