A Complete CRA-Compliant Guide for Canadians Leaving the Country
If you are planning to leave Canada permanently or long-term, understanding your tax residency status is critical. Becoming a non-resident of Canada for tax purposes affects how you report income, manage investments, and interact with the Canada Revenue Agency (CRA).
This guide answers the most searched questions Canadians ask when becoming non-residents — with official CRA references and expert insights from AR LLP Chartered Professional Accountants.
What Does It Mean to Be a Non-Resident of Canada for Tax Purposes?
You are considered a non-resident of Canada when you have severed your primary residential ties with Canada and established residency in another country.
Residency is not based on citizenship or immigration status, but on facts such as:
Primary Residential Ties
- A home in Canada
- A spouse or dependents in Canada
Secondary Residential Ties
- Canadian bank accounts or credit cards
- Driver’s licence
- Health coverage
- Social memberships
- Personal property
🔗 CRA Reference:
Guide to becoming a non-resident of Canada for tax purposes
How Do I Know If I’ve Severed Residential Ties Properly?
CRA reviews your entire factual situation, including:
✔ Where you live most of the year
✔ Where your family lives
✔ Where you earn income
✔ Your immigration status abroad
There is no single test — it is a holistic determination.
🔗 CRA Interpretation Bulletin IT-221R3
CRA Interpretation Bulletin IT-221R3
How Do I Formally Notify CRA That I’m Leaving Canada?
You notify CRA by:
- Filing your final Canadian tax return
- Indicating your date of departure
- Reporting worldwide income up to your departure date
- Completing applicable departure forms (if required)
There is no separate “exit form”, but documentation is crucial.
What Forms Are Required When Becoming a Non-Resident?
Depending on your situation, you may need:
| Form | Purpose |
| T1 General | Final Canadian tax return |
| T1161 | List of properties at departure (if > $25,000) |
| T1243 / T1244 | Deemed disposition election |
| NR73 (optional) | Residency determination request |
🔗 Forms & Info:
CRA tax forms and publications
What Is “Departure Tax” (Deemed Disposition)?
When you become a non-resident, Canada treats certain assets as if you sold them at fair market value on the day you left.
This may trigger capital gains tax on:
- Non-registered investments
- Shares
- Certain trusts
- Foreign property
Excluded assets include:
- Canadian real estate
- RRSPs, RRIFs, pensions
- TFSAs (no tax on exit, but rules change after)
🔗 CRA Guide:
CRA departure tax explained for non-residents
Do I Pay Canadian Tax After I Leave?
Yes — but only on Canadian-source income, such as:
- Rental income from Canadian property
- CPP / OAS
- Canadian dividends or pensions
- Employment income earned in Canada
Most income is subject to Part XIII withholding tax (typically 25%, sometimes reduced by tax treaties).
Do Tax Treaties Affect Non-Residency?
Yes. Canada has tax treaties with over 90 countries that:
- Prevent double taxation
- Determine tax residency when both countries claim you
- Reduce withholding taxes
Treaty “tie-breaker” rules consider:
- Permanent home
- Centre of vital interests
- Habitual abode
- Nationality
🔗 Tax Treaty List:
Canada tax treaties and international tax agreements
Difference Between Resident, Deemed Resident & Non-Resident
| Status | Meaning |
| Resident | Strong residential ties to Canada |
| Deemed Resident | Temporarily abroad but still taxed as resident |
| Non-Resident | No significant ties to Canada |
| Deemed Non-Resident | Tie-breaker treaty applies |
CRA Reporting & Ongoing Compliance
Non-residents may still need to:
- File NR4 slips
- File Section 216 or 217 returns (optional)
- Appoint a Canadian agent for rental income
How Long Must I Stay Out of Canada?
There is no fixed number of days, but spending less than 183 days per year in Canada is generally safer.
CRA looks at overall ties, not just days.
How Long Can I Visit Canada as a Non-Resident?
You may visit temporarily, but:
- Avoid establishing residential ties
- Keep visits short and infrequent
- Maintain proof of foreign residence
Do I Still Pay CPP or OAS?
- CPP: Contributions stop when you stop working in Canada
- OAS: Depends on years of residency and treaty agreements
🔗 OAS Info:
Canada Pension Plan (CPP) and OAS benefits information
What Happens to My TFSA, RRSP, and FHSA?
RRSP
✔ Can remain open
✔ Contributions not allowed after non-residency
✔ Withdrawals subject to withholding tax
TFSA
✖ No contributions allowed
✖ Penalty for contributions while non-resident
FHSA
✖ Contributions stop
✖ Withdrawals taxable unless conditions met
Can Non-Residents File Canadian Taxes Electronically?
Yes — but with limitations:
- Most non-residents must file paper returns
- Some NETFILE access may be restricted
- Authorized representatives can e-file
How Do I Prove I’m No Longer a Resident?
Evidence includes:
- Foreign lease or home ownership
- Residency permit or visa
- Utility bills abroad
- Termination of Canadian ties
You may also file Form NR73 (optional but useful in complex cases).
🔗 NR73 Form:
Canada NR73 residency determination form
Final Thoughts
Becoming a non-resident of Canada is not just a travel decision — it’s a tax event. Planning ahead can save tens of thousands of dollars in unexpected taxes and penalties.
If you are considering leaving Canada, consult a cross-border tax professional to ensure compliance and tax efficiency.
Want Help With Your Non-Resident Tax Planning?
If you’d like help reviewing your situation, planning an exit strategy, or preparing CRA filings, feel free to reach out us at (905) 633-7081 or hassan@arllp.ca
