Email from early retirees leaving Canada to live in Mexico...

"We are very grateful for all the info links to websites.  Often, we feel like we are rowing a boat with one oar; toward a tiny speck in the distance that we think is where we want to get to, but once we reach it, we need to go somewhere else.....  Does that make any sense?"

Email from my niece in 2nd year at Guelph on checking the links and the information available on this page:

"Hi Aunt Eileen, I looked through all the links and they are listed appropriated and it all made sense. I did not realize how many things you needed to do and be aware of when you relocate from the country.  I will have to remember this if I ever live outside Canada, which I hope to do."

Tax information for Canadians who are planning to, or have left Canada to live in another country:

Leaving Canada whether the plan is for an extended absence or forever, there will be tax consequences. 

Me, who would I go see?  The team that has been supporting my clients with foreign tax expertise for years, Kotler, van den Brink, in White Rock www.kvdb.com.  If you are reading this page because you've left, please get expert assistance or you could find yourself in a ton of hot water.

The decision to leave may be easy. 

Extricating yourself from Canada and implanting yourself into another country, not as easy.   

After determining status regarding residence, you will find six variations on filing personal income tax returns:

1. Factual residents (we live here and file a regular T1 return)  
2. Deemed residents (if you stay more than 183 days in Canada, don’t have a residence but don’t have residence in any other country either) who file based on worldwide income 
3. Non resident (NR4 slips report income and tax withheld) who file based on Canadian income only
   • See T4061 for reporting Part XIII tax or Part I tax
   • See T4058 for Non-Residents and Income Tax
4. Non resident Section 216 (NR6 requires approval)
   • See T4144 Electing under S. 216 
5. Non resident Section 216.1
   • (T1287 approved, alternative for actors) 
6. Non resident Section 217 (NR5 requires approval)
   • T4145  Electing under S. 217
   • T4155 OAS Return of Income Guide for Non Residents 

• Factual residents by province or territory 
• Deemed Residents and Non Residents

There are two kinds of residents, factual residents and deemed residents. Note that factual residents are never deemed residents and...

• If you are ordinarily resident in Canada, you are considered to be factually resident 
   
• If you are determined not to be factually resident, you still may be deemed to be a resident. File a tax return for deemed residents because you stayed in Canada for 183 days or more in the year or for other reasons:
  
  
  
  • Member of Canadian Forces
     
  • Working for federal or provincial employee or CIDA
     
  • or under a tax treaty, exempt on 90% of tax because of a relationship to a resident or deemed resident of Canada
     
  • or the dependent child of such persons
     
• Government employees may be either factual or deemed depending on circumstances
   
• A deemed resident is not resident in a province so they have to pay a federal surtax, and will not be entitled to provincial tax credits or provincial benefit programs
   

Canadian Government websites Foreign Affairs and International Trade Canadian Embassies Canada's International Gateway Personal Documents - Service Canada Residence determination for individuals What form do you use to determine status? Form NR73 will assist the International Tax Office to make a determination of your status. Topics of interest-International & NonResidence Tax Treaties Canadian Tax websites Who do you talk to? The International Tax Office This is who you call when you need help with determining your status or figuring out how the treaties with other countries work. Leaving Canada Tax Guide for non residents What records do you keep? Rentals and non residence - special rules Seniors and non residence Senior's - What to do if you are non resident Newcomer or returning to Canada? Canadian residents living abroad Emigration What to do in the year you emigrate. Filing Income Tax Returns       Non resident election to file a return Non residents might want to file a S. 217 election to get a refund of tax withheld if it's beneficial. Canadians who pay non residents must withhold and remit tax under the treaty with other countries. Procedures for disposition of property Disposing of property Income Tax Package - NR and Deemed 2008 Section 116 Income Tax Act S. 128.1 Immigration or Emigration Section 216 Non residents can elect to pay tax on net income instead of gross rents NR6 for Section 216 tax on net rents Section 217 T4145 Electing under S. 217 Guide NR5 approval required to file S. 217 return T106 annual information return under S. 233.1 Information Return of Non-Arm's Length Transactions with Non-Residents See IT 419 Meaning of Arms Length Refer to Sections 251 and 252 of the ITA Reportable transactions for all non residents combined is more than CAN $1,000,000. See IC 87-2 International Transfer Pricing for Transfer Pricing Methodologies Guides Forms Publications Mexico Canada's Tax Convention with Mexico Mexican Consulate - Visas (in English) Mexican Drivers Licence and Insurance USA Entry Requirements to USA Olympics - 2010 Vancouver BC Interested in the 2010 Olympic Games & Tax? Immigration to Canada Imigrating - Establishing Child Tax Benefits Provincial information Leaving your province/territory... There is an adjustment for provincial or territorial tax credits in the year you emigrate or immigrate.  Coverage under your provincial / territorial health care plan may be limited: Alberta British Columbia Manitoba New Brunswick Newfoundland and Labrador Northwest Territories Nova Scotia Nunavut Ontario Prince Edward Island Quebec Saskatchewan Yukon Useful information Average exchange rates

 If you are leaving Canada, please seek advice from professionals who handle international tax matters as this area of taxation is extremely complex, not that any other area of tax isn't just as complex, but this one involves foreign countries, and the rules can change faster than the weather.

Eileen Reppenhagen CGA does not research or endorse any product or service appearing in ads on this site.  Before making any major financial decision(s) you should consult a qualified professional.