Canadians in Vietnam: Determining residency status

Sorry that I did not recognize that you were Canadian in my reply on the other thread.   I guess we do "sound" somewhat alike.      US Citizens don't have to worry about things like tax residency as our government taxes us no matter where we live.     We also don't have to worry about maintaining residency for universal medical care because we don't have any.      Also for retirees, our Medicare stops at the water's edge.  Stay home or don't get sick.   

I have read, probably on this forum, that Canadian medical is based on residency and not citizenship.  If so, and you do not need to work while in Vietnam,  that could be another reason to consider my 6 and 6 concept from the other thread.

Hope you get some more knowledgeable replies from Canadians.

Attempting to give more context to my reply, I'm quoting from this previous post in another thread:

expat.com/forum/viewtopic.php?id=969443#5365299

Raven-Floki wrote:

Hi,

My name is Rick and I'm from Canada. I look forward to moving to Vietnam in the fall and to meeting some of the expats living there. I'm still doing my research, so I don't have a specific location in mind yet. Also, I'm planning for a semi-retirement, depending on what options will be available to me in terms of some part-time work.

I'll be posting specific questions in the near future. For now, I'm just trying to catch up with the answers posted on the forum in the past. Talk to you soon!

Raven-Floki wrote:

While my question is targeted to Canadians living in Vietnam, given that tax legislation in many countries could be similar, I would really appreciate input from anybody that had to deal with this kind of issues.

Residency status affects both income tax liability and provincial health insurance coverage. The Canada Revenue Agency (CRA) - the equivalent of the American IRS - states that significant residential ties to Canada include:
1) a home in Canada
2) a spouse or common-law partner in Canada
3) dependents in Canada

A. Income Taxation
I have a few questions for those who still own a home (and have no spouse / common-law partner or dependents) in Canada , but you live customarily in Vietnam (i.e., more than 183 days per year):
a. Are you still deemed as resident of Canada?
b. Canada has a tax treaty with Vietnam. Are you still required to file income tax returns annually with both the CRA and the Vietnamese tax authority? (Note: I'm assuming that, if you're employed in Vietnam (e.g., English teacher), your employer will withhold and remit the tax owed on your employment income and that you receive some kind of a pay stub that can then be used to support your income tax return. Is this correct?)
c. If you're retired and you were deemed non-resident of Canada for a particular tax year, was your non-employment income (pension, interest, dividends, etc.) paid out in Canadian dollars and taxed at the fixed 25% rate? What happens with any capital gains on your holdings you may realize during the taxation year?
d. Have you had any issues with double taxation? How were they resolved?

If you don't have a home, spouse / common-law partner or dependents in Canada, are you automatically deemed as non-resident of Canada?

B. Provincial Health Insurance Coverage
Most provincial health insurance prescribes that if you plan to be outside Canada for more than seven months in any 12-month period you can keep your coverage for up to two years if you: have a valid health card; make [province name] your primary home (residency status - see above), and will be in [province name] for at least 153 days a year in each of the two years immediately before you leave the country.

According to the above, in the first two years of your living in Vietnam one could still benefit from provincial health insurance coverage. Have you had any problems at the hospital because you were actually not living in Canada, if during that time you had to fly back to Canada to take care of your health issues?

C. Other
While living in Vietnam (especially if you retired there), do you still continue to renew your Canadian driver license and provincial health insurance card when it's due?

Thank you all for reading this lengthy message and for your help.

If you prefer to provide advice in private or if you would like to recommend a local English speaking tax accountant that could shed some light on the residency/taxation issue, please message me.

While I have not seen much of any discussion of this subject for Canadians in the Vietnam forum, there has been a lot of discussion on this topic lately in The Mexico Forum

That's probably because Mexico has a very good system for establishing temporary residency and permanent residency, not requiring employment of any kind.

However, none of that advice will be of use to you if you haven't established residency in Vietnam.

As one Canadian posted in that other thread, you must sell everything including your house as one of the requirements for establishing residency in another country to the satisfaction of the Canadian government.

So the idea that was suggested about spending 6 months in Vietnam and 6 months back home simply won't work, because you won't have a home to return to.

And it's really important for you to understand that you are going to need at least a Temporary Residence Card (TRC) to establish legal residency in Vietnam to the satisfaction of the Canadian government, based on everything I've read so far from Canadians dealing with this issue in Mexico.

It's true that if you spend more than 6 months in Vietnam you can be considered to be residing in Vietnam for tax purposes, but paying any tax liability in Vietnam will still not give you legal residency.

Vietnam might even tell you to pay any taxes that you owe and then deport you, if you have been working without a legal work permit.

So if you are seriously considering all of those questions, it will be imperative for you to first gain legal employment in Vietnam and receive your TRC before you will gain a residency status which will allow you to declare yourself a non-resident of Canada.

Marrying a Vietnamese woman would also give you the ability to establish residency in Vietnam.

You could also put together the equivalent of about $130,000 US dollars to invest in an approved business in Vietnam (that process almost always requires the services of a Vietnamese lawyer).

Those are basically your options as to how to establish residency in Vietnam legally, and from everything I've read, that would be the most important first step in the process for you as a Canadian.

As always I'm happy to be corrected by someone who knows more about this.

Thank you very much for your respective replies and suggestions.

It's my fault that I didn't provide the necessary clarifications, so I'm going to do it now. My plan is to first come for a visit, which may extend from a few weeks to a few months. That means that I'll be on a tourist visa and I would require to get it "renewed" after 90 days, in case I stay that long. For now, while my long term plan is to live there, I'm focused on understanding better - from afar, but later through my visiting - what are the potential challenges I could face and how to find solutions for them. Therefore, I'm not actually looking to get myself in a situation where I'm deemed non-resident of Canada (from taxation point of view) before I fully understand the implications of it. But I do need to know more about the different "tax treatments" applied to those working part-time (or full-time, for that matter) vs. to those that choose retirement. The potential impact, including the related bureaucratic challenges, could influence my decisions regarding what I'm going to do once in Vietnam (long term).

The tax legislation is complicated everywhere and, eventually, one is usually better off by talking to a tax accountant / lawyer in the country where they legally reside (from tax point of view, that is). Consulting a tax accountant / lawyer in the country where one establishes their new home is also advisable. However, these steps take time and cost money (as also mentioned by you). At the appropriate time I'm going to likely ask for that kind of advice. Here I'm just trying to gather some info based on "real life experiences" from expats, (in general, not only Canadians) who had (and continue to have) to deal with tax authorities in the country of their origin and the Vietnamese tax authorities (at the same time).

I'll make sure to continue searching through the replies provided in this and other forums (e.g., Mexico). As I said, in spite of their complexities there could be some similarities too...

Thank you once again, THIGV and OceanBeach92107!

Raven-Floki wrote:

...But I do need to know more about the different "tax treatments" applied to those working part-time (or full-time, for that matter) vs. to those that choose retirement...

I don't wish to belabor the point, but there simply is no retirement in Vietnam for foreigners, except for the circumstances I already mentioned, one of which requires legal employment.

Having said that, there are many, many people who have managed to string together a succession of tourist visas over the years and effectively retired in Vietnam, but without any sort of residency status save that of "tourist".

There are also people, such as myself (mostly US citizens) who have strung together a series of 1 year "business visas" which have turned out to be essentially illegal after the first 3 months of being issued, since it's legally necessary to have a work permit issued within the first 90 days of receiving a one-year business visa; normally accomplished within 90 days IF you received the Visa through a sponsoring company with legitimate employment, and not simply through a Visa agency that uses an "XYZ employer" to satisfy the initial requirements of the Visa.

It has occurred to me (since fully realizing the illegality of my previous business visas after the first 90 days) that it might be a good idea in the future to only enter Vietnam on 3 month business visas.

Then I could exit the country every 3 months and reenter with a brand new business Visa.

Immigration started a new policy back in July of 2020, where anyone in country on a newly issued tourist visa--no matter the approved length of stay stamped in their passport--must report to immigration every 30 days to update their status.

It's possible that policy will not apply to 3 months business visas once the country is fully open and immigration has updated all regulations, but no one really knows.

But again, for Canada non-residency status, that would not provide a temporary residence status in Vietnam.

Bottom line: no retirement visas in Vietnam.

I forgot to include a link to a method of gaining temporary residency by establishing an LLC in Vietnam:

https://www.expat.com/forum/viewtopic.php?id=823006