Non-residents of Canada

This page offers information about the income tax rules that apply to non-residents of Canada.

Residency status

Non-residents

You are a non-resident for tax purposes if you:

• normally, customarily, or routinely live in another country and are not considered a resident of Canada; or
• do not have residential ties in Canada; and
  • you live outside Canada throughout the tax year; or
  • you stay in Canada for less than 183 days in the tax year.

Note
If you lived outside Canada during the tax year and you are a government employee, a member of the Canadian Forces or their overseas school staff, or working under a Canadian International Development Agency (CIDA) program, see Government employees outside Canada for the rules that apply to you. These rules can also apply to your dependent children and other family members.

Deemed residents

You are a deemed resident for tax purposes for the entire tax year if you:

• stay in Canada for 183 days or more in that tax year;
• do not have residential ties with Canada; and
• are not considered a resident of another country under the terms of a tax treaty.

If this is your situation, see deemed residents for the rules that apply to you.

Deemed non-residents

Effective after February 24, 1998, if you are a factual or deemed resident of Canada for tax purposes and a resident of another country according to a tax treaty Canada has signed with the other country, you may be considered a deemed non-resident of Canada. You become a deemed non-resident of Canada when your ties with the other country are such that, under the tax treaty, you are considered a resident there.

As a deemed non-resident, the same rules apply to you as a non-resident of Canada. For more information on the implication of ceasing to be a resident of Canada, see Guide T4056, Emigrants and Income Tax.

What are residential ties?

Residential ties include:

• a home in Canada;
• a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants in Canada;
• personal property in Canada, such as a car or furniture;
• social ties in Canada.

Other ties that may be relevant include:

• a Canadian driver's licence;
• Canadian bank accounts or credit cards;
• health insurance with a Canadian province or territory.

For more information, see Residency - Individuals.

If you want an opinion about your residency status, complete and submit Form NR74, Determination of Residency Status (Entering Canada).

Your tax obligations

As a non-resident of Canada, you pay tax on income you receive from sources in Canada. The type of tax you pay and the requirement to file an income tax return depend on the type of income you receive.

Generally, Canadian income received by a non-resident is subject to Part XIII tax or Part I tax. If the income you receive is:

• subject to Part XIII tax, you do not file a Canadian tax return, except in two situations when you can elect to file a tax return;
• subject to Part I tax, you may have to file a tax return.

Note
If you receive Old Age Security pension during the tax year, you may have to file the Old Age Security Return of Income each year.

Part XIII tax

Part XIII tax is deducted from the types of income listed below. To make sure the correct amount is deducted, it's important to tell Canadian payers:

• that you're a non-resident of Canada for tax purposes;
• your country of residence.

The most common types of Canadian income subject to Part XIII tax are:

• dividends;
• rental and royalty payments;
• pension payments;
• Old Age Security pension;
• Canada Pension Plan and Quebec Pension Plan benefits;
• retiring allowances;
• registered retirement savings plan payments;
• registered retirement income fund payments;
• annuity payments;
• management fees.

Note
The interest that you receive or that is credited to you is exempt from Canadian withholding tax if the payer is unrelated (arm’s length) to you. For more information, see our Non-resident tax calculator or contact the International Tax Services Office.

If you receive Canadian income that is subject to Part XIII tax:

• Canadian payers, including financial institutions, must deduct Part XIII tax when the income is paid or credited to you.
• The Part XIII tax deducted is your final tax obligation to Canada on this income (if the correct amount is deducted).
• Part XIII tax is not refundable. Therefore, do not file a Canadian tax return to report the income unless you elect to file a return because you receive either:
  • Canadian rental income or timber royalties;
  • certain Canadian pension income.
• The usual Part XIII tax rate is 25% (unless a tax treaty between Canada and your home country reduces the rate).

If you think an incorrect amount of Part XIII tax has been deducted from your income, contact the International Tax Services Office.

For more information about Part XIII tax, see IC77-16, Non-Resident Income Tax.

Part I tax

The payer usually deducts Part I tax from the types of income listed below. However, if you carry on a business in Canada, or sell or transfer taxable Canadian property, you may have to pay an amount on account of tax.

• If you carry on a business in Canada, see Guide T4002, Business and Professional Income, to find out if you must pay tax by instalments.
• If you sell or transfer, or plan to sell or transfer taxable Canadian property, see Disposing of or acquiring certain Canadian property.

Even if the payer deducts tax from your income or you pay an amount of tax during the year, you may also have to file a Canadian income tax return to calculate your final tax obligation to Canada on:

• income from employment in Canada or from a business carried on in Canada;
• employment income from a Canadian resident for your employment in another country if, under the terms of a tax treaty between Canada and your country of residence, the income is exempt from tax in your country of residence;
• certain income from employment outside Canada, if you were a resident of Canada when the duties were performed;
• taxable part of Canadian scholarships, fellowships, bursaries, and research grants;
• taxable capital gains from Disposing of certain Canadian property;
• income from providing services in Canada other than in the course of regular and continuous employment.

Disposing of certain Canadian property

For the procedures you must follow if you sell or transfer, or plan to sell or transfer taxable Canadian property (such as real estate, business property, or unlisted shares of a Canadian corporation) see Disposing of or acquiring certain Canadian property.

Electing to file

There are two situations in which you can elect to file a Canadian income tax return for income from which Part XIII tax was deducted:

• when you receive Canadian rental income or timber royalties
• when you receive certain Canadian pension income.

If you elect to file a Canadian income tax return, you may be able to claim a refund for part or all of the Part XIII tax deducted.

For more information:

• To elect to file for Canadian rental income or timber royalties, see the Income Tax Guide for Electing Under Section 216.
• To elect to file for certain Canadian pensions, see electing under section 217.

Filing your income tax return

You must file a Canadian income tax return if you:

• owe tax for the year; or
• want to receive a refund because you paid too much tax in the tax year.

For more information, see "Do you have to file a return?" in the General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

When completing your tax return:

• you may be entitled to claim certain deductions or credits;
• do not include income that has had Part XIII tax deducted, unless you elect to file.

Note
If you receive Canadian rental income or timber royalties and you elect to file, you must report this income on a separate tax return, but you do not include any other type of Canadian income on this separate return. In this situation, you could file more than one Canadian tax return in a tax year: one for the rental income or timber royalties; and one for any other type of Canadian income that you receive.

Which tax package?

The type of Canadian income you receive during the tax year determines which tax return package you should use.

• If you receive income from employment or business or from employment or business and other types of income (capital gains and/or taxable scholarships, fellowships, bursaries, or research grants):
  • use the General Income Tax and Benefit Guide and the forms book for the province or territory where you earn the income;
  • if you receive the other types of income listed above (as well as receiving employment or business income), you will also need Form T2203, Provincial and Territorial Taxes - Multiple Jurisdictions.
• If you receive only capital gains and/or taxable scholarships, fellowships, bursaries, or research grants:
  • use the General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada.

Filing due date

Your tax return has to be filed on or before:

• April 30 of the year after the tax year; or
• if you or your spouse or common-law partner carried on a business in Canada (other than a business whose expenditures are mainly in connection with a tax shelter), the return has to be filed on or before June 15 of the year after the tax year.

Note
A balance of tax owing must be paid on or before April 30 of the year after the tax year, regardless of the due date of the tax return.

Non-residents rendering services in Canada

If you render services in Canada (other than in the course of regular and continuous employment):

• the payer must withhold 15% of the gross amount of the payment;
• you may have to file a Canadian income tax return to report the gross income and net income (gross income minus expenses).

This generally applies to lecturers, consultants, entertainers, artists and athletes.

Note
If you are employed or providing services within the movie industry such as producers, directors, actors, and other personnel working behind the scenes, see Film Advisory Services.

To complete your Canadian income tax return:

• use the General Income Tax and Benefit Guide and the forms book for the province or territory where you perform the services.
  • If you perform services in more than one province or territory, you will also need Form T2203, Provincial and Territorial Taxes - Multiple Jurisdictions, to calculate your taxes for the applicable year.

If all or part of the income is exempt from tax in Canada under the terms of a tax treaty between Canada and your home country, you may be able to claim a deduction on your Canadian tax return. For more information, see Line 256 - Income exempt under a tax treaty.

Non-resident seniors

See the Residency status section of this Web page for an explanation of non-resident status for all individuals, including seniors.

The following information is also available for non-resident seniors :

• Non-resident seniors who receive Canadian Old Age Security payments may be required to file the Old Age Security Return of Income (OASRI).
• Non-resident seniors who receive qualifying Canadian income and want to elect under section 217 to file a Canadian income tax return.

Seasonal agricultural workers

See Seasonal agricultural workers, for more information on the following:

• seasonal agricultural workers from other countries;
• their Canadian employers;
• liaison officers who help seasonal agricultural workers from other countries meet their tax obligations in Canada (liaison officers are government officials -- usually working at an embassy or consulate -- who are responsible for administering the Seasonal Agricultural Workers Program).

Forms and Publications

• Income tax and benefit packages
• IT-221, Determination of an Individual's Residence Status
• T4058, Non -Residents and Income Tax