Understanding Non-Resident Tax Canada is important for Canadians who move abroad or individuals living outside Canada who continue to earn Canadian-source income. Your Canadian tax obligations can depend on your residency status, income sources, Canadian assets, and applicable tax treaties.
What Is Non-Resident Tax Canada?
A non-resident of Canada generally lives outside Canada and has severed significant residential ties with the country. Non-residents are generally taxed in Canada on certain Canadian-source income, rather than their worldwide income.
Canadian-source income may include:
- Rental income from Canadian property
- Employment income earned in Canada
- Pension and retirement income
- Investment income
- Certain capital gains
- Business income connected to Canada
Canadian Tax Obligations for Non-Residents
Certain Canadian-source payments to non-residents may be subject to withholding tax. The applicable rules and rates depend on the type of income and, in some cases, the tax treaty between Canada and the individual's new country of residence.
Non-residents who own Canadian rental property may also have specific withholding and filing requirements. Certain individuals may be eligible to file a Canadian tax return under Section 216 to calculate tax on qualifying rental income.
Departure Tax When Leaving Canada
Individuals who leave Canada and become non-residents may also need to consider departure tax. In certain circumstances, Canada treats some assets as though they were sold at fair market value when the individual leaves the country. This can result in taxable capital gains.
Planning before leaving Canada can help you understand and prepare for these potential obligations.
Get Professional Non-Resident Tax Assistance
Canadian non-resident tax rules can be complex, particularly when you have income, investments, or property in more than one country. WYCPA can help you understand your Canadian tax responsibilities and plan appropriately.
For professional assistance with Non-Resident Tax Canada, visit https://wycpa.ca/ to learn more about WYCPA's accounting and tax services.
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