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Filing Tax as an International Resident/Emigrant

Filing Tax as an International Resident/Emigrant

April 12, 2020

Millions of Canadians live overseas. Snowbirds head south for the winter. Many Canadians work temporarily in Europe or retire in South America. Leaving Canada has tax implications.

Due to NETFILE restrictions by the CRA, all NETFILE-certified software are restricted to send tax returns for non-residents. In other words, only certified e-filers and professionals will be able to file your return on your behalf. With CloudTax Pro, you can file your taxes anywhere in the world as we will be able to virtually guide you through the process. The other option would be to prepare your return manually and send it to the international tax centre.

First, you need to figure out about your residency status. Then, you determine your filing tax as an international resident (emigrant) requirements.

To file or not to file, that is the question! – filing tax as an international resident (emigrant)

You file a tax return for the tax year you leave Canada, if you owe taxes, or you deserve a refund. For instance, if you leave Canada on November 19th of 2019, you would need to file your taxes before April 30th, 2020, as an emigrant (or June 15th for business/self-employed). You also need to report the Canadian and word-wide income, for that particular tax year.

See: Do you have to file a return?

If you don’t file a return, let the CRA know when you left Canada ASAP.

Report worldwide income while you are a Canadian resident. After you cease to be a resident, only report and pay tax on any income earned in Canada. For example, if you move to Spain and you receive a Canadian pension. Then, pay income tax on the Canadian pension since it came from Canada.

If you used to live in another country before you lived in Canada and you resettle in that country, you become non-resident the date you leave. This applies if your spouse stays temporarily to dispose of your property, too.

If you have bank accounts in Canada or receive payments from Canada, notify Canadian payers and the financial institution that you left Canada.

For additional information, see Non-residents of Canada.

Reporting the Year You Leave

The tax year you leave, report your property holdings to the CRA if the value is over $25,000. This doesn’t apply for personal-use property under $10,000, like bank deposits, RRSPs, pension plans, and deferred profit-sharing plans. It could include shares, paintings, jewelry, or a valuable collection.

Regardless of whether you need to file a return or not, complete Form T1161. This is the List of Properties by an Emigrant of Canada. File the form before April 30th, just like the tax filing deadline. The same late filing penalties plus interest apply as when you were a Canadian resident.

To learn more about what income to report, see: ‘Filing Tax as a Non-Resident

Deductions and credits for filing tax as an international resident (emigrant)

Most federal deductions and credits still apply. But provincial or territorial tax credits (Form 479) require your Canadian residency on December 31st. See Deductions, credits, and expenses.

Moving expenses

Usually, you can’t deduct your moving expenses to move out of Canada. But if both items listed below apply, you might:

  • you left to take post-secondary courses level at an educational institution as a full-time student in another country
  • you received a taxable Canadian scholarship, fellowship, bursary, or research grant to attend

See Line 21900 – Moving expenses.

See more ‘How to file your taxes while living abroad

CloudTax Pro for filing tax as an international resident (emigrant)

Filing as an international resident gets complex quickly. CloudTax Pro prepares your taxes, guarantees maximum tax credits and deductions, and files it on your behalf. If you get audited, we work on your behalf to defend you and handle all correspondence with the CRA.

Nimalan Balachandran is the Founder & CEO of CloudTax, an income tax filing platform, certified by the Canada Revenue Agency, that allows simple tax filers to file their taxes from home. He was a former employee at the Canada Revenue Agency, and has been in the tax preparation industry for over 10 years. His goal was to bring his passion for technology and assisting Canadians in minimizing their taxes together, by building new software that allows Canadian residents to file simple taxes on their own. Along with his background in accounting, finance, artificial intelligence & business strategy from Seneca College and Massachusetts Institute of Technology, Nimalan has also worked as a Financial Advisor at Sun Life Financials. Nimalan also co-founded a not-for-profit organization, ATI Foundation, serving individuals with intellectual and physical disabilities in the Greater Toronto Area.



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