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Leaving Canada (emigrants)


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You're considered to have disposed of almost all your property at its fair market value on the day you emigrate from Canada. For more information, please see our Web page "Dispositions of property".

Residency status

Generally, you're considered an emigrant of Canada for tax purposes if you leave Canada to settle in another country and you sever your residential ties with Canada.

This Web page provides basic information about the income tax rules that apply for the year you leave Canada and helps you understand your tax obligations.

What are residential ties?

Severing residential ties may include:

  • disposing of or giving up a home in Canada and establishing a permanent home in the country to which you move;
  • having your spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants leave Canada;
  • disposing of personal property and breaking social ties in Canada and acquiring or establishing them in another country.

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 NR73, Determination of Residency Status (Leaving Canada).

When do you become a non-resident?

When you leave Canada to settle in another country, you usually become a non-resident of Canada for income tax purposes on the latest of the following dates:

  • the date you leave Canada;
  • the date your spouse or common-law partner and dependents leave Canada;
  • the date you become a resident of the country to which you're immigrating.

It's important that you tell us the date you leave Canada because your residency status affects your eligibility to receive:

If you receive such credits or payments after you emigrate, contact us at once.


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Your tax obligations

For the part of the tax year that you're a resident of Canada for tax purposes, you must report "world income" (income from all sources, both inside and outside Canada) on your Canadian tax return.

After you leave Canada, you pay tax to Canada only on income you receive from sources in Canada (see "After you leave Canada").

Note
 If you emigrate from Canada and are participating in the Home Buyers' Plan or the Lifelong Learning Plan, please see the guide called Home Buyers' Plan (HBP) or the guide called Lifelong Learning Plan (LLP), as required, for the special rules that apply.

If you live in Canada for only part of a tax year, you must file a Canadian tax return if you:

  • owe tax; 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.

Which tax package?

For the tax year that you leave Canada and are an emigrant for tax purposes:

If you emigrate from Quebec in the tax year, you may need to file a separate provincial return. For information about your provincial tax liability, contact the Ministère du Revenu du Québec.

Filing due date

Generally, your income tax return must 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 must 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.

After you leave Canada

After you leave Canada, you're a non-resident for tax purposes provided you have severed residential ties with Canada. As a non-resident, you pay tax on income you receive from sources in Canada.

  • This applies in the year you leave Canada and for each year afterwards, provided you remain a non-resident for tax purposes.
  • The type of tax you pay and the requirement to file a Canadian tax return depend on the type of Canadian 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 an tax return.

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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 tax return to report the income, except in two situations when you can elect to file a Canadian tax return.
  • 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 was deducted from your income, contact the International Tax Services Office.

For more information, please see IC77-16, 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.

Even if the payer deducts tax from your income or you pay an amount of tax during the year, you may 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;
  • the taxable part of Canadian scholarships, fellowships, bursaries, and research grants;
  • taxable capital gains from selling or disposing of taxable Canadian property;
  • income from providing services in Canada other than in the course of regular and continuous employment.

Selling or disposing of taxable 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 Disposing of certain types of Canadian property on page 8 of the Non-residents and Income Tax guide. You can also refer to IC72-17, Procedures Concerning the Disposition of Taxable Canadian Property by Non-Residents of Canada-Section 116.


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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:

Date Modified: 2007-01-02

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Important Notices