Job Discussion Forums

[Hoser]

I'm about to go over to Japan to teach with NOVA. Instead of going with their government JMA insurance plan I just decided to get some over here (with Travel Cuts). I got a year's worth but I've since discovered that this works in conjunction with OHIP (ontario health insurance plan) and that your OHIP expires 7 months after you leave Ontario. That means that as of now the last 5 months of my coverage is void.

This leaves me in a bit of a connundrum. Should I apply for an extension to my OHIP plan? This is probably what I will do but I'm wondering how it will affect me tax wise. I'd like to be considered a non resident but if I'm applying for an extension to my OHIP would that mean that I would be guaranteed to having to pay taxes on the money i make in japan? (i fulfill most of the other requirements for non-residency status)

Would another option be to just pick up JMA insurance once my original insurance coverage lapses?

I'm not sure what to do here but I don't think I want to take the risk of being insuranceless even if it is for just 5 months. Any advice?

Also does anybody know if I actually have to go to the OHIP office to apply for an extension or can i just mail in the appropriate documents?

[Hoser]

Any advice guys? I've kind of left this to the last minute so it's tomorrow or never

[Gordon]

If you receive medical benefits from Canada, I'd say you would disqualify yourself from non-residency. You can't have your cake and eat it too. Perhaps the Canada customs site would not spell it out so directly, but if you think about it... you are receiving a pretty big benefit from Canada so you would have to think you would be paying Cdn taxes on your J-income. You will not find any guarantees..sorry.

[JimDunlop2]

Agreed. If you have Canadian healthcare, that hoses you, hoser... At least as far as non-residency is concerned. Non-residency is supposed to be long-term/forever.... Otherwise worldwide income IS taxable if you are a Canadian resident... There is absolutely NO WAY around that and there is NO WAY that the Candian government will believe that you are not a resident when you still have healthcare benefits.

Why don't you just go with Global Health (or another private provider) if you don't feel like shelling out big bucks for national or employee health....

BTW, declaring non-residency works ONCE, and in some rare cases twice.... Consider that if you are planning only a temporary stay in Japan then returning to Canada. That means that if, somewhere down the line you decide to move away again, (let's say) to Europe and work there, you will likely be on the hook to pay Canadian taxes on that income, as non-residency will no longer be an option to you.

IMO, non-residency is meant for those who are SERIOUS about not returning to Canada -- or at least not anytime soon. My wife and I have been away for just over two years now and we DON'T intend on returning... When we are done with Japan we anticipate moving to the U.S. or to Europe. I really have no ties to Canada other than a bank account and a VISA bill and oustanding loan.

P.S. If you do wish to seek non-residency, DON'T FORGET to cancel your OHIP before you leave for Japan.

P.P.S. You may already be hosed because in order to qualify for non-residency you must be absent from Canada for at least six months plus a day. Not that you won't be, but I don't know how the government will view retaining such a major tie to Canada long after your departure... EVEN THOUGH you are physically absent... Something to consider...

[Gordon]

Jim, where did you hear you can only declare for non-residency once? This is my second time around for non-residency and have never heard this before.

[JimDunlop2]

From an ex-coworker of mine when I was still in Canada. She was fighting the gov't because of this very issue... Got stuck with an enormous bill.

But as I said in my previous post, it's not unheard of or impossible to do it again -- just often more difficult.

Think about it logically, Gordon. If it were so easy to just "declare non-residency" as a matter of convenience, every time someone did business abroad all they'd have to do is just stay away from home for 6 months and they'd get away scot-free... The purpose of non-residency is to show "intention" of not returning to Canada... This intention diminishes each time you return for more than just a holiday.

It's like the boy crying wolf. Do it enough times and no one will believe you. This is why most ties to Canada must be cut in order to qualify for non-residency.... (Remember a previous thread on this forum, even registering to vote in a Canadian election in abstentia can disqualify you)...

[Gordon]

Jim, you normally have to be out of Canada for at least 2 years to be a non-rez, so you really can't do it a lot of times. Anyway, I've never heard CCRA say you are limited to one time. They never batted an eye when I got non-rez for the second time.

[JimDunlop2]

Gordon.... Fair enough. Mileage may vary...

I think that your "two years" as well as my "6 months" are equally arbitrary figures... I couldn't find any evidence of a concrete time specified in the Government of Canada website. As close as I could get was this excerpt:

� 10. Where an individual has not severed all of his or her residential ties with Canada, but is physically absent from Canada for a considerable period of time (that is, for a period of time extending over several months or years),

In any event, the matter is a complicated one and the two documents that people should read to avoid getting second-hand information are here:

http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html

and HERE:

http://www.cra-arc.gc.ca/tax/nonresidents/individuals/leaving-e.html

Disclaimer: By reading the information contained in the above links, you will likely get depressed and think that the gov't has you by the short n' curlies no matter what you do... Of course the bias is quite negative to avoid giving anyone the impression that it's easy to avoid paying Canadian income tax.

[Mike L.]

I doubt that plan is designed for anyone speding more than few months abroad.

There's also now way, legally, you can use OHIP while you're residing in Japan.

I would also like to know how they convinved you that anyone would accpet they're insurance in japan? Japan is notorious for it's paperwork and inflexibility in virtually all aspects of social services.

I'd say they've stuck you with some very expensive paper!