A recent court case in Canada has shed light on the complex financial landscape of wealthy individuals with international ties. Weihong (Ruby) Liu, a prominent figure in the business community, owns three shopping malls and a golf course in British Columbia. Despite being labeled a “Vancouver-based billionaire” by various media outlets, Liu's tax residency status has come under scrutiny.

Liu is currently involved in legal proceedings in Ontario, seeking to acquire 25 store leases from The Hudson’s Bay Company, which is undergoing bankruptcy protection. She has expressed her willingness to invest $469 million in this venture. Liu claims to have moved to Canada over a decade ago, during which she began purchasing malls in Victoria and Nanaimo, as well as the 200-store Tsawwassen Mills, located on First Nations land.

In a recent tour of her lavish estate near the University of British Columbia, Liu showcased her lifestyle to independent videographer Dong Nan. However, court documents submitted to the Ontario Superior Court reveal that Liu is not a Canadian citizen. When asked to list her countries of citizenship or permanent residency, she only identified China, which does not permit dual citizenship. Although Liu has previously stated that she is a permanent resident of Canada, the court documents do not confirm her immigration status.

Interestingly, Liu listed her primary address as “20 Yinggu Villa, Shenzhen, Guangdong, China.” Furthermore, when questioned about her residency for income tax purposes, she marked “No” on the transparency document required by British Columbia’s new regulations.

Experts in immigration and tax law have weighed in on Liu's situation. Richard Kurland, a Vancouver immigration lawyer, noted the longstanding debate over how a permanent resident can claim non-residency for tax purposes. He recalled asking a former immigration minister about the contradiction of being a resident for immigration but not for tax obligations.

Sam Hyman, a retired immigration lawyer, explained that establishing residential ties in Canada is crucial for determining tax residency. Typically, a person becomes a tax resident if they are present in Canada for at least 183 days in a year. Tax residents are required to report their worldwide income and pay taxes accordingly.

The Canada Revenue Agency (CRA) outlines additional factors that contribute to tax residency, including business interests, dependents, and property ownership in Canada. To cease being a tax resident, one must sever significant residential ties with the country.

In response to inquiries about Liu's case, CRA officials stated that each individual's tax situation is unique. They confirmed that a person living in Canada with permanent residency and substantial property holdings could still be classified as a deemed non-resident under specific tax provisions. This classification would mean that while they may live in Canada, they would only be taxed on income sourced within the country.

The CRA also mentioned that tax treaties could prevent double taxation, further complicating the issue of residency. They emphasized that definitive answers regarding tax obligations require a thorough examination of individual circumstances.

As the court case progresses, over 200 lawyers, business owners, and government officials have expressed interest in the outcome, which will determine Liu's ability to acquire the leases from The Hudson’s Bay Company. Justice Peter Osborne has reserved his decision on the matter.