Non-residents of Canada
This page provides information about the income tax rules that apply to non-residents of Canada.
- Residency status
Situations where you are considered a non-resident of Canada
- Your tax obligations
Part XIII tax, Part I tax, disposing of certain Canadian property, and electing to file
- Filing your income tax return
Which tax package should you use?, and filing due date
- Entitlements to benefits
Canada child tax benefit and universal child care benefit
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 significant 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.
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) assistance 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.
If you sojourned in Canada for 183 days or more (the 183-day rule) in the tax year, do not have significant residential ties with Canada, and are not considered a resident of another country under the terms of a tax treaty between Canada and that country, see deemed resident of Canada for the rules that apply to you.
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.
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; and
- your country of residence.
The most common types of Canadian income subject to Part XIII tax are:
- 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.
Generally, 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 the Canada Revenue Agency's Non-resident tax calculator or contact the International and Ottawa Tax Services Office.
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.
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).
- The usual Part XIII tax rate is 25% (unless a tax treaty between Canada and your home country reduces the rate).
- 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 from real or immovable properties or timber royalties (see T4144, Income Tax Guide for Electing Under Section 216);
- certain Canadian pension income (Electing under section 217).
If you think an incorrect amount of Part XIII tax has been deducted from your income, contact the Canada Revenue Agency.
For more information about Part XIII tax, see Information Circular 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; and
- income from providing services in Canada other than in the course of regular and continuous employment.
Allison lives permanently in England. During the year, she received interest income from her bank account in England and business income from a permanent establishment in Canada.
As a non-resident of Canada, Allison will file a Canadian return for the year to report only her business income from Canada. She will not report the interest income from her bank account in England on her Canadian return.
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 real or immovable properties or timber royalties; and
- 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:
- On electing to file for Canadian rental income real or immovable properties or timber royalties, see the T4144, Income Tax Guide for Electing Under Section 216.
- On electing 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:
- have to pay tax; or
- want to claim a refund.
For more information, see "Do you have to file a return?".
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.
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 real or immovable properties or timber royalties; and one for any other type of Canadian income that you receive.
Which tax package should you use?
The type of Canadian income you receive during the tax year determines which tax package you should use.
If you receive only income from employment or business use the General Income Tax and Benefit Package for the province or territory where you earn the income along with Guide T4058, Non-Residents and Income Tax. However, if you also receive other types of income (capital gains and/or taxable scholarships, fellowships, bursaries, or research grants), you will also need Form T2203, Provincial and Territorial Taxes for 2015 - Multiple Jurisdictions.
If you receive only other types of taxable Canadian-source income (such as scholarships, fellowships, bursaries, or research grants, capital gains, or from a business with no permanent establishment in Canada), use the Income Tax and Benefit Package for Non-Residents and Deemed Residents of Canada.
Filing due date
Generally, 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.
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.
Entitlements to benefits
Canada child tax benefit
As a non-resident, you are not eligible to receive the Canada child tax benefit (CCTB) unless you are the spouse or common-law partner of a deemed resident and you meet the CCTB eligibility requirements.
Universal child care benefit
As a non-resident, you are not eligible to receive the universal child care benefit (UCCB) unless you are the spouse or common-law partner of a deemed resident and you meet the eligibility requirements. The UCCB payments are usually taxable to the spouse or common-law partner with the lower net income.
Forms and publications
- Income Tax and Benefit Packages (for non-residents and deemed residents of Canada)
- Guide T4058, Non-Residents and Income Tax
- Income Tax Folio S5-F1-C1, Determining an Individual's Residence Status
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