Canadian Non-Resident – Cross Border

If you are a resident of Canada, you are required to report and pay taxes on your world-wide income.

If you pay taxes to a foreign country, you can claim a foreign tax credit which can eliminate double taxation. Note, however, that CRA will almost certainly request documentation proving that foreign taxes were paid (often this means you must file a tax return in the other country.)

As a non-resident of Canada for tax purposes, you only need to file a Canadian tax return if you have earned employment or business income from Canadian sources, or sold taxable Canadian property. You may then be eligible to claim a foreign tax credit in your country of residence.

For other types of Canadian source income, the payer is required to withhold tax. Common examples include dividends, pension payments, RRSP payments and CPP/OAS payments. As the tax has already been withheld, you do not need to file a return and you may be eligible to claim a foreign tax credit in your country of residence. However, you may elect to file a Canadian return if you are eligible to recover some of the withholding tax.

You still may be able to file as a Canadian resident if you have significant ties to Canada. These ties include a home, spouse/partner or dependants in Canada, as well as other secondary ties such as social ties (eg memberships), economic ties (eg bank accounts, credit cards), a Canadian driver’s licence, etc.

For example, students studying abroad will often file returns as Canadian residents.


By filing as a Canadian resident, you will list and pay taxes on your worldwide income.

For an official opinion on your residency status you can submit Form NR74, Determination of Residency Status (Entering Canada) or Form NR73, Determination of Residency Status (Leaving Canada) to the International and Ottawa Tax Services Office.

You should inform any Canadian payers (banks, mutual fund companies, employers, etc) that you will be a non-resident for tax purposes, and let them know your new country of residence. This way, they will deduct the correct withholding taxes, where applicable.

If you are a member of Actra, you should also inform them that your residency status has changed so that the proper withholdings are taken on residuals/royalties. Actors who return to Canada to work must present themselves a non-resident, as opposed to a local.

If you are receiving any benefits such as Child Tax Benefits, Universal Childcare Benefit, or GST/HST credits, you should inform CRA (1 800 959 8281) you are leaving Canada so that they will stop payments. Otherwise, you will have to repay them at a later date, with interest.

If you have an outstanding balance under the home buyers or life long learning plan, you have 60 days to repay those amounts. Otherwise, the remaining balances owing must be included as income on your final Canadian return.

In the year that you leave Canada, you will file a Canadian tax return indicating the departure date. You will report world income for the part of the year you were a resident of Canada. After your departure date, you only pay Canadian income tax on Canadian source income.

If you owned property with a fair market value of over $25,000, you must complete Form T1161 (List of Properties by an Emigrant of Canada). Excluded from the calculation are cash, pension plans and other retirement plans, RESPs, personal effects, real estate etc. You may also need to file form T1243, Deemed Disposition of Property by an Emigrant of Canada.

As a non-resident for tax purposes, you cannot contribute to a Tax Free Savings account; CRA regularly imposes punitive penalties for TFSA contributions made by non-residents of Canada.

No, as a non-resident you are not eligible to receive these benefits.
A certificate of coverage is a form that certifies you are paying CPP (Canada Pension Plan), and are therefore exempt from paying social security taxes in the foreign country you are working in (the US, France, etc.)

To obtain a Certificate of Coverage:

  • Download the appropriate form
  • Once completed, fax it to CRA at 613-954-3398.
You cannot contribute to your TFSA while living outside Canada, even if you have room.

CRA regularly imposes punitive penalties for TFSA contributions made by non-residents of Canada. These amounts are taxed at 1% tax for each month the contribution remains in the account.

However, as a non-resident you are allowed to keep your TFSA, and will not be taxed in Canada on any earnings (note that you may be taxed in your country of residence, however.)

Non-residents do not accrue TFSA contribution room.

Upon leaving Canada, you should advise your bank/fund company that you will be a non-resident.

Non-residents can leave their money in RRSP/RRIFs, and it will continue to grow tax-deferred. Upon withdrawing the money, a non-resident withholding tax (usually 25%) will apply. If the country has a tax treaty with Canada, a foreign tax credit may apply in the other country.

You are allowed to contribute to your RRSPs as a non-resident, if you have room. However, unless you have Canadian income, this doesn’t make much sense from a tax perspective, as you won’t be able to use the deduction for tax savings.
Non-resident individuals should mail T1 tax returns to:

International and Ottawa Tax Services Office

Post Office Box 9769, Station T

Ottawa ON  K1G 3Y4

Canada

There are many factors to consider, for example

  • if you own real estate or have other financial assets in Canada
  • if you want to be considered for jobs reserved for Canadian residents
  • if you are incorporated
  • etc

If you are thinking of moving abroad, please make an appointment with our office to discuss all the considerations.

On your Canadian return, you should use the Bank of Canada exchange rates. The exact rate used will be either the rate in effect on the date of a transaction, or the average annual exchange rate for the year.

On the US side, the IRS does not have an official exchange rate, but will generally accept any posted exchange rate that is used consistently.

Via CRA’s “My Payment” Service (recommended)
1. Go to: My Payment
2. Scroll down to select the “Start My Payment” option.
3. Select the “Pay Now” button.
4. Scroll down to: Non-Residents Header – Part XIII – non-resident withholding tax.
5. Choose “regular remittance.”
6. Enter account number NRF696690.
7. Enter the end of period you are paying for (for example: 2019, January and the amount.)
8. Select “next.”
9. Select the payment you are making (by clicking the radio button).
10. Click “confirm and proceed to pay.”
11. Click “pay now.”
12. Choose the payment method “Interac/Online” (note: paying by credit card is via an outside provider,
who will charge a service feet.
13. Click “Proceed to Online Banking.”
14. Select your financial institution.
15. Sign into Online Banking secure site using your existing login ID and password.
16. Select the account from which to process your payment.
17. Click “continue” to confirm the payment.
18. Save your confirmation number for future reference and proof of payment.

By mail
Make your cheque payable to “Receiver General of Canada”

Send cheques to:
Canada Revenue Agency
875 Heron Road
Ottawa ON K1A 1B1

Clearly mark on the cheque the non-resident tax account number (NRF696690) and the period it applies to (January, 2019, for example).