Canada's departure tax (or deemed disposition) is calculated by determining the Fair Market Value (FMV) of taxable assets on the day you cease to be a Canadian resident, subtracting their Adjusted Cost Base (ACB), and applying a 50% inclusion rate to the resulting capital gain, which is taxed at your marginal rate.
To calculate the departure tax:
The Exit Tax itself is computed as if you sold all of your worldwide assets on the day before you expatriated. Then, you are taxed on the gains. MYTH: I don't have a lot of assets, so I can't be subject to the US Exit Tax.
In many cases, this fee is automatically included in your airfare, while some countries require you to pay at the airport before boarding. 🔍 How to Check if You Need to Pay a Departure Tax: 💡 Look at your airline ticket breakdown – if listed, it's already included.
If you sell Canadian real estate after leaving the country, 25% to 35% of the sale price must be withheld by the buyer and sent to the CRA. You must also file forms like T2062 to report the sale and calculate your final tax obligation.
Can You Avoid Paying the US Exit Tax? Yes — with the right tax planning, many expats can avoid or reduce exit tax liability. The exit tax applies only if you are a covered expatriate, and there are clear strategies to stay out of this category.
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.
Departure taxes are included in most air ticket prices, depending on which airline. Paid in cash upon departure.
For a $70,000 income in Canada (using 2025 rates), you'll pay roughly $13,000 to $20,000 in total taxes (federal, provincial, CPP, EI), depending on your province, resulting in a take-home pay around $50,000-$59,000, with federal tax around 14.5% or 20.5% depending on the portion, plus provincial tax and deductions like CPP and EI.
Failure to comply with exit tax and expatriate U.S. federal tax obligations can result in substantial penalties and potential criminal liability. For instance, unless reasonable cause applies, a $10,000 penalty may apply to a failure to timely file a correct and complete Form 8854 when required for any tax year.
Below are four strategies expatriates and their financial advisors may wish to consider employing to reduce the total amount of tax assessed on the expatriating individual.
Therefore, provided you have severed primary residential ties to Canada, it is possible to maintain certain secondary ties to Canada such as maintaining a bank account, investment account or credit card. The date you become a resident of the new country you are immigrating to.
You'll need to pay a departure tax when you fly back from some countries. In many instances, many passengers will be unaware that they have paid departure tax, as it is often added to the price of a plane ticket. But in some cases, you will need to make sure you've got the correct money (in the correct currency!)
What is the average salary in Canada? If you make $30,000 a year living in the region of Ontario, Canada, you will be taxed $7,709. That means that your net pay will be $22,291 per year, or $1,858 per month. Your average tax rate is 25.7% and your marginal tax rate is 25.9%.
How is Departure Tax Calculated? Departure tax is calculated by determining the fair market value (FMV) of the asset when it was acquired less the FMV of the asset when the asset is deemed to have been disposed.
Departure tax is owed when an individual departs Canada as the individual is deemed to dispose of assets at their fair market values on the date of the departure. Certain assets such as Canadian real estate properties and registered accounts, including RRSPs and TFSAs, are exempt from these departure tax rules.
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).
Each year, on January 1, your annual contribution room resets. The maximum contribution for 2026 is $7,000, the same as for 2025. If you over-contribute to your TFSA, you'll have to pay a tax equal to 1% per month on the excess amount.
A departure tax is a fee charged by a country when a traveler leaves its borders. Depending on the country and its rules, the fee may be included in an airline ticket's price or paid separately at the airport or immigration desk.
The rate is HK$120 per passenger for air tickets purchased before 1 October 2025, and HK$200 for air tickets purchased on or after this date. Those who meet specific exemption criteria may apply for a refund within 28 days from the departure day.
CBSA Entry and Exit Records
Every time you cross the Canadian border by air, land, or sea, the Canada Border Services Agency (CBSA) logs the date, location, and direction of travel. Since 2019, these detailed records have been stored in a centralized database and are fully accessible to the CRA.
Yes, all scheduled airlines (i.e. not charters) should include the international departure tax in their fares.