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If you left Canada during 2012 to settle in another country, and you are considered to be an emigrant of Canada for income tax purposes, this guide will explain the income tax rules that apply to you. It will also help you understand the tax implications of becoming a non‑resident.
This guide does not apply to you if you left Canada in 2012 and you were a deemed or factual resident of Canada in 2012. For more information about deemed and factual residents, see Pamphlet T4131, Canadian Residents Abroad.
Generally, you are an emigrant for income tax purposes if you leave Canada to settle in another country and you sever your residential ties with Canada. Severing your residential ties may include:
If you left Canada in 2012 to live in another country and you are related to or a member of the family of a deemed resident of Canada, you will generally not be considered to have emigrated from Canada if, under an agreement or convention (including a tax treaty) between Canada and the other country, 90% or more of your income from all sources is exempt from tax in that other country because of your relationship with that person.
If you left Canada in 2012 and keep residential ties in Canada, you are usually considered a factual resident. However, if you are also considered to be a resident of another country with which Canada has a tax treaty, you may be considered a deemed non resident. Deemed non residents are subject to the same rules as emigrants.
For a list of countries with which Canada has tax treaties, see Tax treaties. For more information, contact us.
If you left Canada or are planning to leave Canada and need help determining your residency status, complete Form NR73, Determination of Residency Status (Leaving Canada), and send it to us as soon as possible. We will give you our opinion of your residency status based on the information you provide on this form.
For more information about residency status, see Interpretation Bulletin IT‑221, Determination of an Individual's Residence Status.
When you leave Canada to settle in another country, you usually become a non‑resident for income tax purposes on the latest of the following dates:
If you lived in another country before living in Canada and you are leaving Canada to re‑establish a residence in the other country, you usually become a non‑resident on the date you leave Canada. This applies even if your spouse or common‑law partner temporarily stays in Canada to dispose of your home.
Generally, you become a deemed non‑resident at a time when your residential ties in the other country are such that, under the tax treaty between Canada and that country, you are considered to be a resident of that country and not of Canada.
Emigrants are usually not eligible for CCTB, CDB, or UCCB payments. If either you or your spouse or common‑law partner receives CCTB (including those payments from certain related provincial or territorial programs), CDB, and/or UCCB payments, it is important that you tell us your date of emigration as soon as possible. If you receive a payment after you emigrate, you should notify us immediately.
If you are the spouse or common‑law partner of a deemed resident and we consider you to be an emigrant in 2012, you may still be eligible for CCTB, CDB, and/or UCCB payments. If this is your situation, you will have to send us a completed Form CTB9, Canada Child Tax Benefit‑Statement of Income, each year. For more information, contact us.
As an emigrant, you are not entitled to the GST/HST credit (including any related provincial credits). If either you or your spouse or common‑law partner receives the GST/HST credit, it is important that you tell us your date of departure as soon as possible. If you receive a payment after you leave, you should notify us immediately.
When you emigrate from Canada after buying or building a home that qualifies under the HBP, or withdrawing funds under the LLP, you have to repay the balance of the funds you withdrew by the earliest of the following dates:
If you have not repaid the funds within that time, you have to include the unpaid amount as income on your return for the year you emigrate. For more information, see Guide RC4135, Home Buyers' Plan (HBP), or Guide RC4112, Lifelong Learning Plan (LLP).
When you emigrate from Canada, you can keep your TFSA. However, as a non‑resident of Canada you cannot contribute to your TFSA. For more information, go to our Tax‑free savings account (TFSA) page or see Guide RC4466, Tax‑Free Savings Account (TFSA).
Canadian financial institutions and other payers have to withhold tax at a rate of 25% on certain types of Canadian source income paid or credited to you after you become a non‑resident. The most common types of income subject to non‑resident withholding tax include:
If there is a tax treaty between Canada and your new country of residence, the terms of the treaty may reduce the rate of non‑resident withholding tax on certain types of income. For information on rates of non‑resident withholding tax for the various countries with which Canada has a tax treaty visit our Non‑Resident Tax Calculator. You can also call us at 613‑940‑8499 (we accept collect calls) or at 1‑855‑284‑5946 from Canada and the United States.
If you receive certain types of Canadian‑source income (such as the types of income listed above) after you become a non‑resident, contact the payers to let them know that you are a non‑resident so they can withhold tax at the applicable rate.
Generally, arm's length interest paid or credited to non‑residents of Canada is exempt from Canadian withholding tax. For more information, contact us.
Generally, you do not report on your Canadian return any income from Canada from which non‑resident tax was withheld. This tax withheld is usually your final tax obligation to Canada on this income.
However, if you receive rental income from real property in Canada or timber royalties on a timber resource property or a timber limit in Canada, you can choose to pay tax on these types of income using a different taxing method. By doing this, you may be able to receive a refund for part or all of the non‑resident tax withheld. For information, see Guide T4144, Income Tax Guide for Electing Under Section 216.
You can also choose to pay tax on certain other types of Canadian‑source income using a different taxing method. For more information, see Election under section 217 of the Income Tax Act.
If you receive the old age security pension, you may have to file Form T1136, Old Age Security Return of Income. For more information, see Guide T4155, Old Age Security Return of Income Guide for Non‑Residents.
If the provisions of a tax treaty were not considered, Canadian payers may have withheld tax from tax‑exempt income, or they may have withheld more tax than was necessary. If this is your situation, you can ask us for a refund of the excess tax withheld by completing Form NR7‑R, Application for Refund of Part XIII Tax Withheld.
We can only refund excess tax withheld if you complete and send us Form NR7‑R no later than two years after the end of the calendar year in which the payer sent us the tax. For example, if the payer sent us more than the required amount of tax in 2012, you have to send Form NR7‑R to us by December 31, 2014.
Certain Canadian‑source amounts that are otherwise subject to non‑resident withholding tax can instead be transferred to a registered pension plan (RPP), registered retirement savings plan (RRSP), or registered retirement income fund (RRIF), without having this tax withheld.
These amounts include payments out of an RPP, a deferred profit‑sharing plan, a RRIF, an RRSP, or a retiring allowance. The amounts have to be transferred directly, and you have to complete Form NRTA1, Authorization for Non‑Resident Tax Exemption, before you make any transfers. For more information, contact us.
This section has instructions that you need if you owned property on the date you emigrated from Canada.
If the fair market value (FMV) of all the property you owned when you left Canada was more than $25,000, complete Form T1161, List of Properties by an Emigrant of Canada, to list all of your properties inside and outside Canada and attach it to your 2012 return. However, certain properties are excluded from this calculation and should not be included in the list. For more information, and a list of the properties excluded from this calculation, see Form T1161.
File your return by the filing due date. The penalty for failing to file Form T1161 by the due date is $25 per day you are late. There is a minimum penalty of $100, and a maximum penalty of $2,500.
Even if you do not have to file a return, you must send Form T1161 on or before your filing due date.
If you ceased to be a resident of Canada in 2012, you are deemed to have disposed of almost all your property at its fair market value (FMV) when you left Canada and to have reacquired it for the same amount right after. This is called a deemed disposition.
This applies to most properties. Some of the exceptions are:
On your 2012 return, you have to calculate and include in income the capital gain or capital loss that results from your deemed disposition.
To calculate your capital gain (or loss) for a deemed disposition of property, complete Form T1243, Deemed Disposition of Property by an Emigrant of Canada.
Include on your Schedule 3, Capital Gains (or Losses) in 2012 the capital gain (or loss) that you reported on Form T1243.
You can elect to defer the payment of tax on income relating to the deemed disposition of property, regardless of the amount. You would then pay the tax later, without interest, when you sell (or otherwise dispose of) the property. This election does not apply to the deemed disposition of an employee benefit plan.
If you make this election for 2012, you must do so on or before April 30, 2013.
If you send us Form T1244 after this deadline, you have to include a letter indicating the reasons you could not send the election on time. We will consider accepting your late election based on the explanation given in your letter.
When is security required?
If you make this election for 2012 and the amount of federal tax owing from the deemed disposition of property is more than $14,500 ($12,107.50 for former residents of Quebec), you have to provide us with adequate security acceptable to cover the amount. You may also be required to provide security to cover any applicable provincial or territorial tax payable.
Contact us as soon as possible to make acceptable arrangements before April 30, 2013.
If the amount of federal tax on income relating to the deemed disposition of property is $14,500 or less ($12,107.50 or less for former residents of Quebec), security is not required. You must however complete Form T1244 and attach it to your return.
Dave emigrated from Canada on May 15, 2012. When he left, he owned shares in a Canadian corporation. He bought the shares in March 1998 for $15,000. On May 15, 2012, the fair market value (FMV) of the shares was $27,000.
Since Dave ceased to be a resident of Canada, he was deemed to have disposed of the shares for $27,000 on May 15, 2012. As a result, he had a capital gain of $12,000 ($27,000 − $15,000).
When he filed his 2012 return, Dave completed Form T1161 to list the properties he owned when he left Canada. On Form T1243, he reported a capital gain of $12,000 from the shares he was deemed to have disposed of. On Schedule 3 he calculated a taxable capital gain of $6,000 (50% × $12,000). He attached his completed Schedule 3, Form T1161, and Form T1243 to his return.
Dave chose to defer the payment of tax on income relating to the deemed disposition of his shares. Since the federal tax owing on the deemed disposition was not more than $14,500, he did not need to give us security for it, before he filed his 2012 return. He simply completed Form T1244 and attached it to his return.
What type of security is acceptable?
Bank letters of guarantee, bank letters of credit, and bonds from the Government of Canada or a province or territory of Canada are considered acceptable forms of security.
Other types of security may also be acceptable, such as shares in private or publicly traded corporations, certificates in precious metals, various other marketable securities, a charge or mortgage on real property, or valuable personal property.
What if the required security cannot be raised?
If you cannot give us the required security, contact the Revenue Collections Section of the tax services office in your region as soon as possible, in order to make acceptable arrangements.
If you ceased to be a resident of Canada after October 1, 1996, and you later re‑establish Canadian residency for income tax purposes, you can elect to make an adjustment to the deemed dispositions you reported when you emigrated.
As a non‑resident, you may have disposed of, or plan to dispose of, taxable Canadian property such as Canadian real property, Canadian business property, or unlisted shares of Canadian corporations. If so, see Information Circular IC72‑17, Procedures Concerning the Disposition of Taxable Canadian Property by Non‑Residents of Canada - Section 116, to find out what you need to do.
For more information about the disposition of taxable Canadian property by non‑residents, go to our Disposing of or acquiring certain Canadian property page or contact us.
When you dispose of property that was deemed disposed of when you left Canada, the deferred tax is payable on or before April 30 of the year following the year of the actual disposition.
It may be possible to reduce your tax payable for the year you emigrated from Canada if one, or more, of the following applies:
Your request to reduce your tax payable must be made within six years of your emigrant return's initial assessment, or we must have a valid waiver (Form T2029, Waiver in Respect of The Normal Reassessment Period) on file.
For more information, contact us.
Even though you lived in Canada for only part of 2012, you may have to file a 2012 return. For information, see "Do you have to file a return?" in your General Income Tax and Benefit Guide.
If you emigrated from Quebec in 2012, you may have to file a separate provincial return. For information about your provincial tax liability, contact Revenu Québec.
If you determine that you do not have to file a return for 2012, you should let us know the date you left Canada as soon as possible.
Use the tax package for the province or territory where you resided on the date you left Canada in 2012.
Generally, your return for 2012 has to be filed on or before April 30, 2013.
For exceptions to this date, see "What date is your return for 2012 due?" in the tax guide.
If you are electing under section 217, see When is your section 217 return due?.
You will find most of the information you need to complete your 2012 return in the General Income Tax and Benefit Guide. However, in the following section, you will find other useful information that will help you complete your return.
When completing this area on your return, be sure to enter your date of departure from Canada.
Enter your spouse or common‑law partner's net world income for 2012. Net world income is the net income from all sources both inside and outside of Canada. Underneath, enter your spouse or common‑law partner's net world income for the period you were a resident of Canada. If applicable also enter the amount of universal child care benefit included on line 117, and the amount of universal child care benefit repayment included on line 213 of his or her tax return.
As a non‑resident, you are not eligible to receive the GST/HST credit (including any related provincial credits). Therefore, do not complete this area on page 1 of your return.
For the part of 2012 you were considered as a resident of Canada, you have to report your world income. World income is income from all sources both inside and outside Canada.
If you have rental income, the income you have to report and the period end date you have to enter on your rental statement should reflect your period of residency in Canada, up to your date of departure. Otherwise, we may adjust your return and create a separate section 216 return based on the period after your departure date.
However, for the part of 2012 that you were not a resident of Canada, you have to report the following amounts:
For the part of 2012 that you were not a resident of Canada, do not include on your tax return any gain or loss from disposing of taxable Canadian property, or loss from a business carried on in Canada, if, under a tax treaty, the gain from that disposition or any income from that business would be exempt from tax in Canada. For more information about the disposition of taxable Canadian property, see Guide T4058, Non‑residents and Income Tax.
Emigrants are usually not allowed to deduct moving expenses incurred for a move out of Canada.
However, if you left Canada to take courses at the post‑secondary level as a full‑time student at an educational institution in another country, and you received a taxable Canadian scholarship, bursary, fellowship, or research grant to attend that educational institution, you may be eligible to deduct your moving expenses. For more information, see Form T1‑M, Moving Expenses Deduction.
Complete Schedule 1, Federal Tax, to calculate your federal tax and any federal credits that apply to you.
As an emigrant, you may be limited in the amount you can claim this year for certain federal non‑refundable tax credits.
To determine the total amount you can claim, add:
The total amount you can claim for each federal non‑refundable tax credit cannot be more than the amount you could have claimed if you were a resident of Canada for the whole year.
You can claim the following federal non‑refundable tax credits, as long as they apply, to the part of 2012 that you were a resident of Canada:
In addition, you can claim, as long as they apply to your situation, the other remaining federal non‑refundable tax credits based on the number of days you were a resident of Canada in 2012.
Use the date of departure you entered in the "Identification" area of your return to calculate the number of days you were a resident of Canada. See the General Income Tax and Benefit Guide for a list of the other remaining federal non‑refundable tax credits.
Shirley left Canada on January 26, 2012, to live in another country. She claims a basic personal amount of $768.78, calculated as follows:
|26 days in Canada||× $10,822 =||$768.78|
|366 days in 2012|
Shirley claims $768.78 on line 300 of her Schedule 1.
Jennifer is 70 years old. She left Canada on September 30, 2012. Her net income between January 1 and September 30, 2012, was $30,000. Jennifer can claim an age amount calculated as follows:
1) Prorate the maximum age amount of $6,720
|274 days in Canada||× $6,720 =||$5,030.82 (A)|
|366 days in 2012|
2) Prorate the base income amount of $33,884
|274 days in Canada||× $33,884 =||$25,366.71 (B)|
|366 days in 2012|
Since Jennifer's net income is greater than (B), she must reduce amount (A) by 15% of the amount of her income that is more than the prorated base income amount (B), as follows:
$30,000 − $25,366.71 =$4,633.29 (excess amount)
$4,633.29 × 15% = $694.99 (C)
The age amount that Jennifer can claim is (A) minus (C):
$5,030.82 − $694.99 = $4,335.83
Jennifer claims $4,335.83 on line 301 of her Schedule 1.
Suzanne and her spouse Richard left Canada permanently July 26, 2012. Suzanne's net income between January 1 and July 26 was $100,000 and Richard's was $800 in the same period. Suzanne can claim a spouse or common‑law partner amount calculated as follows:
1) Prorate the maximum spouse or common‑law partner amount of $10,822.
|208 days in Canada||× $10,822 =||$6,150.21|
|366 days in 2012|
2) Subtract spouse's or common‑law partner's net income.
$6,150.21 ‑ $800.00 = $5,350.21
Suzanne claims $5,350.21 on line 303 of her Schedule 1.
You can claim the following federal non‑refundable tax credits, as long as they apply, to the part of 2012 that you were not a resident of Canada if you are reporting Canadian‑source income (as listed under Income):
In addition, if the Canadian‑source income you are reporting for the part of 2012 that you were not a resident of Canada represents 90% or more of your net world income for that part of the year (or if you had no income from sources inside and outside Canada for that part of the year), you can claim the remaining applicable federal non‑refundable tax credits in full. See the General Income Tax and Benefit Guide for the remaining federal non‑refundable tax credits.
If you are claiming full federal non‑refundable tax credits, attach a note to your return stating your net world income (in Canadian dollars) for the part of 2012 that you were not a resident of Canada. Show separately the net income you received from sources inside and outside Canada for that part of the year. We cannot allow the full amount of these federal credits without this note.
In the year you emigrated, you usually have to pay tax to the province or territory where you lived before you left Canada.
If you lived in Quebec before you left Canada, you can get information on filing a Quebec tax return and calculating your provincial tax by contacting Revenu Québec.
If you lived in another province or territory before you left Canada, see the General Income Tax and Benefit Guide and forms book for the province or territory you lived in. This will provide information on how to calculate your provincial or territorial tax. You will have to complete Form 428.
Similar to the amount of federal non‑refundable tax credits, as an emigrant, you may be limited in the amount you can claim this year for certain provincial or territorial non‑refundable tax credits.
Generally, the rules for calculating your provincial or territorial non‑refundable tax credits are the same rules as those used to calculate your corresponding federal non‑refundable tax credits. However, the amounts used in calculating most provincial or territorial non‑refundable tax credits are different from the corresponding federal credits.
Generally, you are not entitled to claim provincial or territorial credits since you were not a resident of Canada on December 31, 2012.
See the General Income Tax and Benefit Guide unless you were living in Quebec before you left Canada. If you were living in Quebec, any overpayment of CPP or QPP contribution will be refunded or used to reduce your balance on your federal income tax return. Claim on line 308 of Schedule 1, in dollars and cents, the total of the CPP or QPP contributions shown in boxes 16 and 17 of your T4 slips, and we will calculate the overpayment for you. You can also calculate your overpayment by using Form T2204, Employee Overpayment of 2012 Canada Pension Plan Contributions and 2012 Employment Insurance Premiums. As a Quebec emigrant, you claim the amount of your overpayment, if any, on page 4 of your return by writing code 5552 above line 437, and entering the amount of the overpayment to the right of this code. Add this amount to your total credits at line 482.
When you receive certain types of income from Canada after you emigrate, the Canadian payer has to withhold non‑resident tax on the income and send it to us. This tax withheld is usually your final tax obligation to Canada on the income.
However, under section 217 of the Income Tax Act, you can elect to file a Canadian return to report the types of Canadian source income listed in the next section. If this election is beneficial, your final tax obligation to Canada on this income will be calculated using the information provided in this tax return and, as a result, you might receive a refund of some or all of the non resident tax withheld on this income.
You will benefit from electing to file a return under section 217 if the total tax payable on line 435 of your return is less than the tax you would otherwise pay if you did not make this election. If the election is not beneficial, we will process your return without considering your election under section 217.
This election applies to certain types of Canadian‑source income which you receive after you leave Canada, including:
If you elect under section 217 for 2012, you have to file your 2012 return on or before June 30, 2013.
However, if you have a balance owing for 2012, you have to pay it on or before April 30, 2013, to avoid interest charges.
If you send us your 2012 return after June 30, 2013, according to the Income Tax Act, your section 217 election cannot be accepted. If this is your case and the required amount of non resident tax was withheld on your eligible 217 income, we will consider the amount withheld to be your final tax obligation to Canada on that income. However, if the payer withheld less than the required amount of tax, we will send you an assessment for the difference.
You may also be reporting Canadian‑source income, other than eligible section 217 income, on your return. If you are reporting business income and you have to pay tax on that income, you have to file the return on or before June 15, 2013. Otherwise you have to file your return by April 30, 2013 if:
If you owe tax for 2012 and do not file your return for 2012 within the dates we specified above, we will charge you a late‑filing penalty. We will also charge compound daily interest starting May 1, 2013, on any unpaid amounts owing for 2012.
Do not file a separate return to elect under section 217. Instead, complete one return for 2012. Follow the instructions in Completing your 2012 return and the following special rules.
Write "section 217" at the top of page 1 of your return and enter your date of departure from Canada.
On your return, include:
Generally, you have to pay federal tax, as well as provincial or territorial tax for the province or territory where you lived before you left Canada.
Federal and provincial or territorial non‑refundable tax credits
If you include on your return 90% or more of your net world income for the part of 2012 that you were not a resident of Canada, you can claim all of the federal and provincial or territorial non‑refundable tax credits that apply to you. This represents your allowable amount of federal and provincial or territorial non‑refundable tax credits.
If you have included in your net income less than 90% of your net world income for the part of 2012 that you were not a resident of Canada, your provincial or territorial non‑refundable tax credits are determined using the same rule as provided under Provincial or territorial non‑refundable tax credits. However, your federal non‑refundable tax credits cannot be more than the lesser of a) or b) below:
Attach a note to your return giving a breakdown of your 2012 net world income (in Canadian dollars) for the part of 2012 that you were not a resident of Canada. Show separately the income you received from sources inside and outside Canada for that part of 2012. We cannot allow any non‑refundable tax credits without this information.
For the other rules that may apply, contact us.
If you intend to elect under section 217 on eligible income you have not yet received, you can apply to reduce the tax that the payer would otherwise have to withhold at source.
To apply for this, complete and send us Form NR5, Application by a non‑resident of Canada for a reduction in the amount of non resident tax required to be withheld.
Canada has income tax conventions or agreements (commonly referred to as tax treaties) with many countries. These tax treaties are designed to avoid double taxation for those who would otherwise have to pay tax in two countries on the same income. Generally, tax treaties determine how much each country can tax income such as wages, salaries, pensions, and interest. To get the status and text of Canada's tax treaties, visit the Department of Finance's Web site.
If you receive Canadian‑source employment income or Canadian self‑employment business income that is exempt from tax in Canada because of a tax treaty, you can ask your employer or the payer not to withhold tax. However, before your employer or the payer can stop withholding tax from your income, you need a waiver letter from us. Send your request for a waiver letter to your Canadian employer's or the payer's tax services office. If the officials at the tax services office agree that you qualify, they will send you a waiver letter to give to your employer or payer.
Canada has tax treaties with the following countries:
|Cameroon||Israel||Nigeria||Trinidad and Tobago|
|China, People's Republic||Ivory Coast||Oman||Turkey|
|Cyprus||Japan||Papua New Guinea||United Arab Emirates|
|Czech Republic||Jordan||Peru||United Kingdom|
|Ecuador||Korea, Republic of||Portugal||Venezuela|
If you need more information after reading this guide, visit our website or contact us. You will find the address and telephone numbers at the end of this guide.
To get our forms or publications, go to Forms and publications or call 1‑800‑959‑2221 (from Canada and the United States). If you are outside Canada and the United States, call us at 613‑940‑8495. We accept collect calls.
For personal and general tax information by telephone, use our automated service, TIPS, by calling 1‑800‑267‑6999 (calls from Canada and the United States). You can find more information about TIPS in the General Income Tax and Benefit Guide.
Use the following telephone numbers to contact us:
|Calls from Canada and the United States||1‑855‑284‑5942|
|Calls from outside Canada and the United States||613‑940‑8495|
|We accept collect calls.|
Monday to Friday (holidays excluded)
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From February 18, 2013, to April 30, 2013, except Easter weekend:
From 8:15 a.m. to 9:00 p.m., Eastern time, on weekdays
From 9:00 a.m. to 5:00 p.m., Eastern time, on Saturdays
You can write to the International Tax Services Office at the following address:
International Tax Services Office
Post Office Box 9769, Station T
Ottawa ON K1G 3Y4
If you have comments or suggestions that could help us improve our publications, send them to:
Taxpayer Services Directorate
Canada Revenue Agency
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