Shadab Tariq

Tax relief could be coming for Americans in Canada

Under a new bill, non-resident citizens could be exempt from tax on foreign-source income

The proposal defines a non-resident citizen as a person that:

  • is a U.S. citizen;
  • has a tax home in a foreign country;
  • is in full compliance with U.S. income tax laws for the previous three years; and
  • either establishes that he has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, or is present in a foreign country or countries during at least 330 full days during such taxable year.

The U.S. is one of a handful of countries that tax based on citizenship, not residency. This rule has been a longstanding source of grief for Americans in Canada, who are subject to the Foreign Account Tax Compliance Act (FATCA) and can face double taxation.


Comments are closed.