As a Canadian living and working abroad, it’s essential to know whether you’re considered a resident or non-resident of Canada. The answer can have a significant impact on your overall tax burden: Canadian residents are required to report and pay tax on all their worldwide income based on Canadian tax law, while those considered non-resident pay tax only on Canadian source income.
Know your tax residency before you go
Because the distinction between resident and non-resident isn’t always clear, if you’re planning a move to the United States or overseas, we strongly recommend you consult with a professional tax advisor before your departure date. We can help you determine whether you’ll maintain your Canadian tax residency and the process you’ll need to follow if you choose to sever your ties—and what that will mean for your tax return moving forward.
Helping Canadians with foreign income avoid double taxation
Our expatriate tax specialists have experience handling a variety of complex tax situations. For example, if you’re working abroad or have overseas investments and have already paid tax on that income in the jurisdiction in which you’re working, you may be eligible for a foreign tax credit that can offset some or all of the Canadian tax owing on that income. Our team has the experience and insights to ensure you get all of the tax credits available to you.
In addition, Canadians leaving the country and intending to sever their tax residency are subject to a departure tax. This is applied to any unrealized gains on investments held outside registered plans—but does not apply to Canadian real estate or RRSPs. We can help ensure you meet all of your tax obligations.
Contact our tax specialists to ensure you’re not surprised by any unexpected Canadian tax liability on your overseas income.