The amount of income tax you pay in Canada depends on whether you are a resident or non-resident of Canada. This depends on why and how long you stay outside Canada, the ties you establish in your new country, how long and how often you return to Canada and your residential ties to Canada. Your residency status will determine if you are a factual resident, a deemed resident, a non-resident, or a deemed non-resident of Canada for income tax purposes.
Canadians leaving Canada to travel or live abroad
If you spend part of the year travelling and you maintain residential ties to Canada, you will usually be considered a factual resident of Canada for income tax purposes.
Going to the United States
If you spend part of the year in the United States for health reasons or on vacation, and you still maintain residential ties to Canada, see Pamphlet, Canadian Residents Going Down South. This pamphlet will tell you about certain income tax requirements that may affect you and will help you understand the U.S. tax laws that may apply to you.
Factual residents of Canada for income tax purposes
You are considered a factual resident of Canada if you are not living in Canada but are still considered a resident of Canada for income tax purposes. You could be a factual resident of Canada if you:
- work temporarily outside Canada
- teach or attend school in another country
- commute daily or weekly to the United States to work, or
- vacation outside Canada.
Deemed residents of Canada for income tax purposes
You may be a deemed resident of Canada if:
- you lived outside Canada during the tax year and you are a government employee, a member of the Canadian Forces or its overseas school staff, or working under a Canadian International Development Agency 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.
- You stayed in Canada for 183 days or more (the 183-day rule) in the tax year, do not have significant residential ties to Canada and are not considered a resident of another country under the terms of a tax treaty between Canada and that country.
Non-residents of Canada for income tax purposes
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 to Canada, and you live outside Canada throughout the tax year, or you stay in Canada for less than 183 days in the tax year.
Generally, when you leave Canada to settle in another country (emigrate), you become a non-resident of Canada for income tax purposes.
Deemed non-residents of Canada for income tax purposes
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 you would be considered a resident of that other country under the tax treaty that Canada has with the other country. If you are a deemed non-resident, you must follow the same rules as a non-resident of Canada.
Source: Travel Canada
