Non-residents of Canada

• Residency status
  • Non-residents
  • Deemed residents
  • Deemed non-residents
  • What are residential ties?
• Your tax obligations
  • Part XIII tax
  • Part I tax
  • Selling or disposing of certain Canadian property
  • Electing to file
• Filing your income tax return
  • Which tax package?
  • Filing due date
• Non-residents rendering services in Canada
• Non-resident seniors
• Seasonal agricultural workers
• For more information...
  • Income tax and benefit packages
  • T4058, Non-residents and income tax
  • IT-221, Determination of an Individual's Residence Status

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Residency status

Non-residents

You're a non-resident for tax purposes if you:

• normally, customarily, or routinely live in another country and aren't considered a resident of Canada; or
• don't have residential ties in Canada; and
  • you live outside Canada throughout the tax year; or
  • you stay in Canada for less than 183 days in the tax year.

Note: If you lived outside Canada during the tax year and you're a government employee, a member of the Canadian Forces or their overseas school staff, or working under a Canadian International Development Agengy (CIDA) program, please see Government employees outside Canada for the rules that apply to you. These rules can also apply to your dependent children and other family members.

Deemed residents

You're a deemed resident for tax purposes for the entire tax year if you:

• stay in Canada for 183 days or more in that tax year;
• don't have residential ties with Canada; and
• aren't considered a resident of another country under the terms of a tax treaty.

If this is your situation, please see the section called deemed residents for the rules that apply to you.

Effective after February 24, 1998, if you're a factual or deemed resident of Canada for tax purposes and a resident of another country according to a tax treaty Canada has signed with the other country, you may be considered a deemed non-resident of Canada. You become a deemed non-resident of Canada when your ties with the other country are such that, under the tax treaty, you're considered a resident there.

Note: If on February 24, 1998, you were already a resident of a country with which Canada has a tax treaty, you will not be considered a deemed non-resident of Canada. You will only be considered a deemed non-resident of Canada if after February 24, 1998:

• you ceased to be a resident of the tax treaty country, then become a resident of that country again; or
• you move from the tax treaty country and become a resident of another country with which Canada has a tax treaty.

The ordinary rules on ceasing to be a resident of Canada apply to deemed non-residents. For more information on the implication of ceasing to be a resident of Canada, see guide T4056, Emigrants and Income Tax.

You may be a deemed non-resident for tax purposes if you're otherwise a deemed resident of Canada who, under a tax treaty, is considered a resident of another country.

As a deemed non-resident, the same rules apply to you as a non-resident of Canada.

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Residential ties include:

• a home in Canada
• a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants in Canada
• personal property in Canada, such as a car or furniture
• social ties in Canada.

Other ties that may be relevant include:

• a Canadian driver's licence
• a Canadian bank account or credit cards
• health insurance with a Canadian province or territory.

For more information, please see IT-221, Determination of an Individual's Residence Status.

If you would like an opinion about your residency status, please complete and submit Form NR74, Determination of Residency Status (Entering Canada).

Your tax obligations

As a non-resident of Canada, you pay tax on income you receive from sources in Canada. The type of tax you pay and the requirement to file an income tax return depend on the type of income you receive.

Generally, Canadian income received by a non-resident is subject to Part XIII tax or Part I tax. If the income you receive is:

• subject to Part XIII tax, you do not file a Canadian tax return, except in two situations when you can elect to file a tax return
• subject to Part I tax, you may have to file a tax return.

Note: If you receive Old Age Security pension during the tax year, you may have to file the Old Age Security Return of Income.

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Part XIII tax

Part XIII tax is deducted from the types of income listed below. To make sure the correct amount is deducted, it's important to tell Canadian payers:

• that you're a non-resident of Canada for tax purposes
• your country of residence.

The most common types of Canadian income subject to Part XIII tax:

• interest and dividends
• rental and royalty payments
• pension payments
• Old Age Security (OAS) pension
• Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits
• retiring allowances
• registered retirement savings plan (RRSP) payments
• registered retirement income fund (RRIF) payments
• annuity payments
• management fees

Note: Interest received from Canada Savings Bonds and Treasury Bills is not subject to Part XIII tax.

If you receive Canadian income that's subject to Part XIII tax:

• Canadian payers -- including financial institutions -- must deduct Part XIII tax when the income is paid or credited to you.
• The Part XIII tax deducted is your final tax obligation to Canada on this income (if the correct amount is deducted).
• Part XIII tax is not refundable. Therefore, do not file a Canadian tax return to report the income unless you elect to file a return because you receive either:
  • Canadian rental income or timber royalties
  • certain Canadian pension income.
• The usual Part XIII tax rate is 25% (unless a tax treaty between Canada and your home country reduces the rate).

If you think an incorrect amount of Part XIII tax has been deducted from your income, contact the International Tax Services Office.

For more information about Part XIII tax, please see IC77-16R4, Non-Resident Income Tax.

Part I tax

The payer usually deducts Part I tax from the types of income listed below. However, if you carry on a business in Canada, or sell or dispose of taxable Canadian property, you may have to pay an amount on account of tax.

• If you carry on a business in Canada, please see T4002, Business and Professional Income, to find out if you must pay tax by instalments.
• If you sell or dispose -- or plan to sell or dispose -- of taxable Canadian property, please see the section called Selling or disposing of certain Canadian property.

Even if the payer deducts tax from your income or you pay an amount of tax during the year, you may also have to file a Canadian income tax return to calculate your final tax obligation to Canada on:

• income from employment in Canada or from a business carried on in Canada
• employment income from a Canadian resident for your employment in another country, if the terms of a tax treaty between Canada and your country of residence make the income exempt from tax in your country of residence
• certain income from employment outside Canada if you were a resident of Canada when the duties were performed (under proposed changes)
• the taxable part of Canadian scholarships, fellowships, bursaries, and research grants
• taxable capital gains from Selling or disposing of certain Canadian property.
• income from providing services in Canada other than in the course of regular and continuous employment.

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Selling or disposing of certain Canadian property

For the procedures you must follow if you sell or dispose, or plan to sell or dispose of taxable Canadian property (such as real estate, business property, or unlisted shares of a Canadian corporation) please see the section called Selling or disposing of certain Canadian property.

Electing to file

There are two situations in which you can elect to file a Canadian income tax return for income that has had Part XIII tax deducted:

• when you receive Canadian rental income or timber royalties
• when you receive certain Canadian pension income.

If you do elect to file, you may be able to claim a refund for part or all of the Part XIII tax deducted.

More information is available:

• To elect to file for Canadian rental income or timber royalties, please see the Income Tax Guide for Electing Under Section 216.
• To elect to file for certain Canadian pensions, please see electing under section 217.

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Filing your income tax return

You must file a tax return if you:

• owe tax for the year; or
• want to receive a refund because you paid too much tax in the tax year.

For other examples, please see "Do you have to file a return?" in the General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

When completing your tax return:

• you may be entitled to claim certain deductions or credits
• do not include income that has had Part XIII tax deducted, unless you elect to file.

Note: If you receive Canadian rental income or timber royalties and you elect to file, you must report this income on a separate tax return, but you do not include any other type of Canadian income on this separate return. In this situation, you could file more than one Canadian tax return in a tax year: one for the rental income or timber royalties; and one for any other type of Canadian income that you receive.

Which tax package?

The type of Canadian income you receive during the tax year determines which tax return package you should use.

• If you receive income from employment or business or from employment or business and other types of income (capital gains, scholarships, fellowships, bursaries, research grants):
  • use the General Income Tax and Benefit Guide and the forms book for the province or territory where you earn the income
  • if you do receive the other types of income listed above (as well as receiving employment or business income), you'll also need Form T2203, Provincial and Territorial Taxes - Multiple Jurisdictions.
• If you receive only capital gains, scholarships, fellowships, bursaries or research grants:
  • use the General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

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Filing due date

Generally, your tax return has to be filed on or before:

• April 30 of the year after the tax year; or
• if you or your spouse or common-law partner carried on a business in Canada (other than a business whose expenditures are mainly in connection with a tax shelter), the return has to be filed on or before June 15 of the year after the tax year.

Note: A balance of tax owing must be paid on or before April 30 of the year after the tax year, regardless of the due date of the tax return.

Non-residents rendering services in Canada

If you render services in Canada (other than in the course of regular and continuous employment):

• the payer must withhold 15% of the gross amount of the payment
• you may have to file a Canadian income tax return to report the gross income and net income (gross income minus expenses).

This generally applies to lecturers, consultants, entertainers, artists and athletes.

Note: If you're employed or providing services within the movie industry such as producers, directors, actors, and other personnel working behind the scenes, please see Film Industry Services.

To complete your Canadian income tax return:

• use the General Income Tax and Benefit Guide and the forms book for the province or territory where you perform the services.
  • If you perform services in more than one province or territory, you will also need Form T2203, Provincial and Territorial Taxes - Multiple Jurisdictions, to calculate your taxes for the applicable year.

If all or part of the income is exempt from tax in Canada under the terms of a tax treaty between Canada and your home country, you may be able to claim a deduction on your Canadian tax return.

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Non-resident seniors

Please see the "Residency status" section of this Web page for an explanation of non-resident status for all individuals, including seniors.

To assist non-resident seniors, we've created two separate Web pages for seniors:

• Non-resident seniors who receive Canadian Old Age Security payments may be required to file the Old Age Security Return of Income (OASRI).
• Non-resident seniors who receive qualifying Canadian income may want to elect under section 217 to file a Canadian income tax return.

Seasonal agricultural workers

To assist seasonal agricultural workers, we've created a separate Web page that provides information for:

• seasonal agricultural workers from other countries
• their Canadian employers
• liaison officers who help seasonal agricultural workers from other countries meet their tax obligations in Canada (liaison officers are government officials -- usually working at an embassy or consulate -- who are responsible for administering the Seasonal Agricultural Workers Program).