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Non-residents of Canada

This page provides 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 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.

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) 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.

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 significant residential ties with Canada; and
  • are not considered a resident of another country under the terms of a tax treaty that Canada has with another country.

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

Deemed non-residents

If you are a factual resident of Canada and a resident of another country with which Canada has a tax treaty, you may be considered a deemed non-resident of Canada for tax purposes.

You become a deemed non-resident of Canada when your ties with the other country become such that, under the tax treaty with which Canada has with the other country, you would be considered a resident of that other country.

As a deemed non-resident, the same rules apply to you as a non-resident of Canada.


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What are residential ties?

Residential ties include:

  • a home in Canada;
  • a spouse or common-law partner or dependants who stayed in Canada;
  • personal property in Canada, such as a car or furniture; and
  • social ties in Canada.

Other ties that may be relevant include:

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

For more information on residency status, see Residency - Individuals or Interpretation Bulletin IT-221, Determination of an Individual's Residence Status.

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.

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.


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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:

  • 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
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 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 filea return because you receive either:
  • 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 us.

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:

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.

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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; 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:

Filing your income tax return

You must file a Canadian income tax return if you:

  • owe tax for the year; or
  • want to claim a refund.

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 should you use?

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


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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.

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; and
  • 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:

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 - Exempt foreign income.

For more information, see Rendering services in Canada.


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Non-resident seniors

See Residency status for an explanation of non-resident status for all individuals, including seniors.

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

For more information, see Non-resident seniors.

Seasonal agricultural workers

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

  • seasonal agricultural workers from other countries;
  • their Canadian employers; and
  • 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

 
Date Modified: 2013-01-03

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