There are many tax implications to be considered for those who earned income in Canada and who may call another country home.
First, it's important to determine your residency status for tax purposes.
A person is considered a non-resident of Canada (for Canadian income tax purposes), if they:
- Had no residential ties to Canada and lived outside Canada all year, and were not a deemed resident, OR
- Had no residential ties to Canada and they stayed in Canada for less than 183 days, OR
- Were deemed not to be resident in Canada under the Income Tax Act because of the provisions of a tax treaty Canada has with another country.
Where a person's residency status is unclear, they can request an opinion from the CRA by using:
A person is classified as a deemed resident of Canada (for Canadian income tax purposes), if they :
- Did not have significant residential ties in Canada
- Stayed in Canada for 183 days or more, AND
- Were not considered a deemed non-resident of another country under a tax treaty, OR
- Lived outside Canada during 2019
- Were not considered a factual resident of Canada because they did not have significant residential ties in Canada, AND
- Were one of the following:
- A member of the Canadian Forces overseas school staff and chose to file a return as a deemed resident of Canada
- A federal or provincial government employee and were either a resident of Canada just before being posted abroad or received a representation allowance for 2019
- A person working under a Global Affairs Canada assistance program if were a resident of Canada at any time during the three month period just before beginning your duties abroad
- A person who, under a tax treaty, agreement, or convention between Canada and another country, is exempt from tax in that other country on 90% or more of their income from all sources because of their relationship to a resident (including a deemed resident) of Canada or;
- A dependent child of one of the persons described here, with a net world income in 2019 was not more than the basic personal amount (see line 30000) in Canadian dollars.
Significant residential ties almost always include a home in Canada, and a spouse or common-law partner and/or dependants who stayed in the country while the subject was living abroad. Other relevant residential ties may include:
- a Canadian driver's licence
- Canadian bank accounts or credit cards
- health insurance with a Canadian province or territory
- personal property, and social ties within Canada.