Canada decides tax obligations by residency, and citizenship does not change the result. A Canadian who works remotely from Bali, Lisbon, or Medellin may still owe Canadian tax on all of their income. The guide below explains how the Canada Revenue Agency (CRA) decides your status. The guide also covers what happens when you leave for good and which forms may apply.
How the CRA decides if you are still a Canadian resident
The CRA looks at all of your facts together. Four steps cover most of what matters for a nomad.
1. Check your ties to Canada
Residential ties carry the most weight. The CRA’s page on determining your residency status splits them into two groups.
- Significant ties: a home in Canada, a spouse or common-law partner in Canada, and dependants in Canada.
- Secondary ties (property and money): a car or furniture in Canada, Canadian bank accounts, credit cards, or retirement plans, and memberships in Canadian clubs.
- Secondary ties (documents and coverage): a Canadian driver’s licence, a Canadian passport, and provincial health insurance.
Unless you cut all of your significant ties when you leave, you generally stay a Canadian resident. You then owe tax on your worldwide income. A home that stays available for your use counts as a significant tie, even while you are abroad. A home rented to an unrelated tenant on normal terms may count for less, depending on the circumstances.
Secondary ties are weighed together, so one of them would rarely decide the question alone. Courts have also tended to treat long absences as temporary when ties remain. A nomad who keeps a home, partner, or children in Canada is likely to stay a factual resident. Many months away does not change the result.
2. Count your days in Canada
The 183-day rule applies to people who are not factual residents. If you spend 183 days or more in Canada in a calendar year, you become a deemed resident for that whole year. The CRA counts any part of a day as a day, and vacation days in Canada count toward the total.
- Deemed resident: taxed on worldwide income for the full year. You pay federal surtax instead of provincial tax, and you cannot claim provincial tax credits or provincial benefits.
- Non-resident: no significant ties and fewer than 183 days in Canada in the year.
The day count only matters after the CRA decides you are not a factual resident. A person with a home in Canada can be a resident while spending very few days there. Nomads who return for long family visits should keep a simple log of their days.
3. Check whether a tax treaty changes the result
Canada has tax treaties with many countries. If both Canada and another country see you as a resident, the treaty tie-breaker rules decide which one wins. When the treaty picks the other country, the CRA treats you as a deemed non-resident of Canada. Deemed non-residents follow the same rules as people who left Canada, and that includes departure tax.
Most of Canada’s treaties apply these tests in order:
- Permanent home: you are resident where you have a home available to you all the time.
- Centre of vital interests: if you have a permanent home in both countries, the country with closer personal and economic ties wins. The CRA looks at family, work, and where you manage your property.
- Later tests: each treaty lists further tests for cases the first two do not settle.
Nomads who move often may find the first test hard to pass. The home must be available continuously, and a short stay for travel or work does not count. You also need to show that the other country taxes you on your worldwide income. The CRA assumes you are not a resident there until you prove it.
Some countries treat a long stay as a reason to tax you as a local resident. Our guide to digital nomad visa vs tourist visa explains the choice between a tourist stay and a nomad visa.
4. Ask the CRA for an opinion
Form NR73, Determination of Residency Status (Leaving Canada) lets you ask for the CRA’s view of your status. The CRA bases its opinion only on the facts you provide, and the opinion does not bind the agency. In some cases, the Income Tax Rulings Directorate may issue a binding advance ruling. A ruling usually needs all the facts to be known before you leave.
Filling in the form can help you spot ties you forgot about. Even if you do not file it, the questions work as a useful checklist.
What to file once you know your status
5. If you remain a Canadian resident
The CRA says factual residents are taxed as if they had not left. A yearly filing includes these items:
- Income: report all income from inside and outside Canada, including pay from foreign clients.
- Provincial tax: pay it to the province where you keep your ties.
- Filing date: April 30 of the following year, or June 15 if you or your spouse or common-law partner run a business. Tax owing is still due April 30, even when the return is due June 15.
- Foreign tax credit: claim tax paid to another country on income from that country with Form T2209. The credit is the lower of the foreign tax paid and the Canadian tax on that income.
- Foreign property: file Form T1135 if foreign property cost more than $100,000 CAD at any point in the year. Money held in foreign accounts counts toward the total. Personal-use property does not count.
- Benefits: you can still apply for the Canada child benefit and the Canada Groceries and Essentials Benefit. The CRA needs a return each year to calculate the Canada child benefit.
The foreign tax credit helps nomads who pay tax in their new country. The credit can reduce the Canadian bill on the same income. Canadians who also hold US citizenship face a second set of rules, because the United States taxes its citizens wherever they live. Our guide to how US citizens file taxes while working abroad covers that side.
6. If you are leaving Canada for good
You are an emigrant when you leave to live in another country and cut your main ties. According to the CRA’s Leaving Canada page, you become a non-resident on the latest of three dates:
- the day you leave Canada
- the day your spouse or common-law partner and dependants leave Canada
- the day you become a resident of the country you move to
Enter that departure date on page 1 of your return for the year you leave. Report your worldwide income up to the departure date. After it, you report only Canadian-source income.
The CRA also treats most of your property as sold at fair market value on the day you leave. The rule applies even if you sell nothing. The CRA calls this a deemed disposition, and the resulting tax is often called departure tax. The property can include shares, jewellery, paintings, and collections. The main exceptions are:
- Canadian real estate and Canadian business property used through a permanent establishment in Canada
- RRSPs, TFSAs, and other registered plans
- property you owned when you became a resident, if you lived in Canada 60 months or less in the 10 years before you left
Three forms handle the process, and the CRA’s guidance on property for emigrants covers each one.
- Form T1243: reports the deemed sale and any gain or loss.
- Form T1161: lists your property if its total fair market value is more than $25,000 CAD. Cash, registered plans, and personal-use items worth less than $10,000 each stay off the list. The late penalty is $25 per day, with a $100 minimum and a $2,500 maximum. The form is due even when you do not have to file a return.
- Form T1244: lets you defer the tax until you sell the property. File it by April 30 of the year after you leave. The CRA requires security if the federal tax owing is above $16,500 CAD ($13,777.50 for former Quebec residents).
A nomad with a large investment account could face a tax bill on gains they have not sold yet. The deferral election can help with cash flow, though the CRA may ask for security.
7. After you become a non-resident
Non-residents pay Canadian tax only on Canadian-source income. The points below usually come up first.
- Tell your payers and banks: the CRA requires you to notify Canadian payers and banks that you are no longer a resident.
- Part XIII tax: the default rate is 25% on certain Canadian payments, such as dividends, rent, and pensions. A tax treaty can lower it. The tax withheld is usually your final Canadian tax on that income. You can elect under section 217 to file a return instead.
- RRSP withdrawals: institutions generally withhold 25% on lump sums paid to non-residents. Some treaties lower the rate for regular retirement payments.
- TFSA: you can keep it, and income and withdrawals stay tax free in Canada. You cannot contribute while you are a non-resident, and your room does not grow. Your new country may tax it differently.
- Benefits: non-residents generally cannot receive the Canada Groceries and Essentials Benefit or the Canada Child Benefit. Contact the CRA right away if payments continue after you leave.
- Health coverage: provincial plans set their own rules for time spent outside the province, so check with your plan before you go. If your coverage lapses or does not cover long stays abroad, private health insurance for digital nomads can take its place.
Common mistakes
- Treating citizenship as the test. Canadian tax follows residency. The CRA lists a Canadian passport as one secondary tie among many.
- Keeping a home just in case. A home available for your use is a significant tie, and one significant tie usually keeps you resident.
- Skipping Form T1161 because no tax is due. The penalty applies even when no tax is owing.
- Forgetting the new country. Ending Canadian residency does not stop another country from taxing you as a resident.
- Waiting to tell the CRA. If you do not need to file a return, the CRA still asks you to report your departure date as soon as possible.
Your Canadian tax status depends on your ties, your days in Canada, and any treaty with your new country. Sorting these out before you leave can help you avoid surprise bills later. Once your status is clear, you can pick a base with more confidence. When you are ready to choose your next destination, search flights on FlyBibe and book the route that fits your plan.
The article gives general information and is not tax advice. Tax rules change, and individual situations differ. Confirm current requirements with the CRA or a qualified tax professional before you make plans. The information reflects CRA pages reviewed on October 1, 2026.