As a non-resident, you generally only need to file a Canadian tax return if you have taxable Canadian-source income (e.g., employment, business income, or selling taxable Canadian property) or if you want to claim a refund for over-withheld tax. If tax was fully withheld at source on income like pensions or interest, a return is often not required.
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.
You must file a personal income tax return if any of the following applies: You have to pay tax on income earned during the previous calendar year. The tax authorities requested that you file a return. You sold or otherwise disposed of property, such as real estate or corporate shares.
In actual fact, you can be absent from Canada as long as you want. The Canadian government recognizes that citizens may travel extensively, work or study abroad. You will always maintain your Canadian citizenship. What absentia may affect is your Canadian health care coverage and income tax.
While you are required to file taxes in both the U.S. and Canada, you don't have to pay taxes in both countries. The U.S.-Canada tax treaty has some tools to avoid double taxation.
In addition to the failure-to-file penalty, there is also a penalty for failing to pay taxes owed by the due date. This penalty is assessed based on the amount of unpaid taxes and accrues interest over time until the balance is paid in full.
Canada's 90% rule helps non-residents and recent immigrants claim full federal tax credits (like the Basic Personal Amount) if 90% or more of their net worldwide income for the relevant tax year is from Canadian sources; otherwise, credits are prorated (reduced) based on their Canadian residency period, ensuring fairness for those who weren't residents all year.
Canadians travelling extensively, living or working abroad may still have to pay Canadian and provincial or territorial income taxes.
Canada's 183-day rule is a key factor in determining tax residency: if you stay in Canada for 183 days or more in a calendar year, you're generally considered a resident for tax purposes for that entire year (a "deemed resident"), even if you don't have strong ties, subjecting your worldwide income to Canadian tax. However, this rule works alongside Canada's complex residency tests and tax treaties, meaning you might become a resident sooner with significant ties (like family or property) or avoid it if a treaty designates you a resident of another country.
You can lose citizenship through voluntary renunciation, such as by applying for citizenship in another country with intent to give up your current one; through involuntary denaturalization, often due to fraud in the naturalization process or joining certain prohibited groups; or by committing acts like treason or serving in a foreign military at war with your country.
A failure-to-file penalty is 5% of the unpaid tax obligation for each month your return is late. This penalty can't exceed 25% of your total unpaid taxes, and will max out after five months.
Failure to file can result in loss of government benefits, such as the Canada Child Benefit and GST/HST credits. The CRA has strong collection powers, including wage garnishment and liens on property. While jail time is rare, deliberate tax evasion can lead to criminal prosecution.
You generally don't have to file U.S. federal taxes if your income falls below the standard deduction for your filing status (e.g., single, married) and age, but you might still need to if you have self-employment income over $400, certain investment income, or received Social Security benefits that become taxable due to other income. Even if not required, filing is smart to claim refundable credits or get refunds, but some people, like certain low-income seniors or those with only non-taxable income, are typically exempt.
Even if you are no longer living in the U.S., you are required to file a return by the stated deadlines.
You can reduce or eliminate the amount of income tax you need to pay by claiming tax credits and certain expenses. If you paid too much tax, you may get a tax refund. Even if you had no income, you should still file your tax return each year starting before you turn 19.
Complete Form NR73 to get CRA 's opinion on whether you would be considered a non-resident of Canada. For more information, see Non-residents of Canada, Residency status determination and Income Tax Folio S5-F1-C1, Determining an Individual's Residence Status.
As a non-resident of Canada, you are subject to Canadian income tax on most Canadian-source income paid or credited to you during the year unless all or part of it is exempt under a tax treaty.
Tax treatment of nonresident alien
If you are a nonresident alien engaged in a trade or business in the United States, you must pay U.S. tax on the amount of your effectively connected income, after allowable deductions, at the same rates that apply to U.S. citizens and residents.
The "90-day rule" for non-residents typically refers to two different concepts: in U.S. immigration, it's a guideline for determining if a non-immigrant misrepresented their intent by engaging in certain activities (like unauthorized work or immediate marriage) within 90 days of arrival, leading to visa fraud or inadmissibility. In Canadian tax law, the 90% rule allows non-residents to claim full federal tax credits if 90% or more of their world income is from Canadian sources, otherwise, credits are prorated.
Non-resident Indians (NRIs) are taxed on income earned or collected in India. This could be from sources like property rent, share dividends, and investment and savings capital gains, if over a specified limit. Income earned outside India is not taxable in India.
Non-residents have to pay a 25% tax on amounts that are taxable under Part XIII. However, this rate can be reduced to a lower rate or an exemption can be given under the provisions of the Income Tax Act or a bilateral tax treaty between Canada and another country.
Yes. Living abroad permanently does not end U.S. tax obligations. As long as you are a U.S. citizen or green card holder, you generally must continue filing U.S. tax returns each year.
The five key mistakes to avoid in a TFSA are over-contributing (and re-depositing withdrawals in the same year), treating it like a basic savings account (missing out on investment growth), failing to track your room (relying solely on CRA data), improperly moving funds (withdrawing and redepositing instead of transferring), and investing in non-qualified assets or high-risk trades (like day trading or certain foreign stocks that incur withholding tax).
Canadians who live or work abroad or who travel a lot may still have to pay Canadian and provincial or territorial income taxes. Visit International and non-resident taxes for information about income tax requirements that may affect you.