Canadian Expats and Taxes

Canadian Expats and Taxes How to Stay Compliant While Living Abroad

Taxes Don’t Stop When You Cross Borders

Understanding Your Tax Residency Status

Leaving Canada doesn’t mean leaving behind your tax obligations. Whether you’re working overseas, retiring in a sunnier climate, or simply seeking adventure, Canadian expatriates must navigate a complex web of tax rules to stay compliant with the Canada Revenue Agency (CRA). At Accounting Montreal, we specialize in helping Canadian expats understand their tax responsibilities and file accurately — no matter where in the world they call home.

Resident, Non-Resident, or Deemed Resident?

Before you determine what forms to file or what taxes you owe, you must establish your Canadian tax residency status. This classification has significant implications for your filing requirements and liability.

  • Resident: You maintain significant residential ties to Canada.
  • Deemed Resident: You're away for most of the year but don’t qualify as a non-resident.
  • Non-Resident: You've severed major ties with Canada and have established residence elsewhere.

Why It Matters?

If you’re considered a resident or deemed resident, you are taxed on your worldwide income. As a non-resident, you’re only taxed on Canadian-source income. Misclassification can lead to audits, penalties, or double taxation — which is why our team at Accounting Montreal conducts thorough residency assessments before we proceed.

Other Services

Having Trouble Managing Your Finance?

CONTACT US NOW
  • Why Every Entrepreneur Needs a…
    Why Every Entrepreneur Needs a…

    Running a small business in Montreal is exciting, but it’s…

  • Is It Worth Getting an…
    Is It Worth Getting an…

    Accounting Montreal • Small Business Guide Short answer: usually, yes;…

  • Canadian Business Tax Updates for…
    Canadian Business Tax Updates for…

    Accounting Montreal • Corporate Tax Advisory A practical summary of…

  • What Do I Need to…
    What Do I Need to…

    Filing your Canadian taxes can feel overwhelming, especially with all…

  • Under Gordon Frank’s Leadership, Accounting…
    Under Gordon Frank’s Leadership, Accounting…

    At Accounting Montreal, we believe that strong communities are built…

  • Canadian Expat Annual Tax Checklist
    Canadian Expat Annual Tax Checklist

    Taxes don’t stop when you move abroad; they just get…

    • The Departure Tax – What Expats Need to Know

    If you officially become a non-resident, Canada treats it as though you’ve sold certain assets — triggering the Departure Tax (also known as deemed disposition).
    What Assets Are Affected?
    You may be subject to capital gains tax on items such as:
    • Real estate outside of Canada
    • Stocks and mutual funds
    • Certain business interests
    However, Canadian-based pensions, RRSPs, and personal-use property under a set threshold are typically excluded.
    Planning Before You Leave
    It’s essential to plan ahead. Our team helps expats minimize departure tax implications by identifying potential exemptions, deferrals, or strategic sales before the move.
    • Personalized tax strategies based on individual financial goals
    • Industry-specific advice for professionals and business owners
    • Integration of tax planning with overall financial planning
    • Support for life events impacting taxes (e.g., marriage, retirement)
    • Collaborative approach to long-term financial success
    Filing Taxes as a Non-Resident
    Even if you’ve left Canada behind, you may still need to file a return or pay withholding taxes on income generated in Canada.
    What Income Is Taxable for Non-Residents?
    As a non-resident, you are taxed on Canadian-source income such as:
    • Rental income from Canadian properties
    • Canadian pensions (e.g., CPP, OAS, RRSP withdrawals)
    • Employment income earned in Canada
    • Dividends or capital gains from Canadian investments
    Withholding Tax and Elective Returns

    Most Canadian income paid to non-residents is subject to a 25% withholding tax. However, you may be eligible to file a Section 217 or Section 216 return to potentially reduce this rate and reclaim overpaid taxes. Accounting Montreal helps determine which elections apply to your case.

    Contact Us Now to Get Started

    Tax Treaties and Avoiding Double Taxation

    Canada has tax treaties with over 90 countries designed to prevent double taxation and ensure fairness for expats.
    How Treaties Help
    Tax treaties may:
    • Allocate taxing rights between Canada and your new country
    • Reduce withholding tax rates
    • Provide foreign tax credits
    We review the treaty relevant to your country of residence to help ensure you’re not taxed twice on the same income.
    Foreign Tax Credits and Deductions
    When you pay tax abroad, you may be eligible to claim a foreign tax credit on your Canadian return. This is an essential part of reducing your total tax liability, and our experts at Accounting Montreal ensure proper documentation is in place to maximize your benefits.

    What About Registered Plans Like RRSPs and TFSAs?

    Canadian registered accounts can get complicated once you’re living abroad.
    RRSPs – Tax-Deferred but Not Tax-Free

    RRSPs maintain their tax-deferred status while you’re abroad, but withdrawals are subject to withholding tax. Depending on your new country’s tax system, these withdrawals may also be taxed again — unless covered by a tax treaty.

    RRSPs – Tax-Deferred but Not Tax-Free

    The TFSA is not recognized internationally. Many expats find that while it remains tax-free in Canada, it’s taxable in their country of residence, defeating the purpose of the account.

    Planning Your Withdrawals
    A strategic withdrawal plan can prevent over-taxation and minimize impact. We can help you decide whether to keep, convert, or wind down these accounts based on your long-term plans.
    Contact Us Now to Get Started

    Common Mistakes Expats Make (and How to Avoid Them)

    Tax rules for expats are complex — and small mistakes can become costly.

    Top 5 Mistakes We See
    • Failing to file a departure return
    • Not updating the CRA about change of address/residency
    • Overlooking tax treaty benefits
    • Ignoring foreign income reporting obligations
    • Not seeking expert tax guidance
    At Accounting Montreal, we offer expat tax services designed to eliminate these risks and simplify your compliance.

    How Accounting Montreal Helps Canadian Expats

    Tax rules change, and each expat situation is unique. That’s why we take a personalized approach to your tax planning and filing.

    Our Expat Tax Services Include:

    • Residency assessments and departure tax planning
    • Filing Canadian tax returns for non-residents
    • Structuring RRSP and TFSA withdrawals
    • Navigating tax treaties and foreign tax credits
    • Corresponding with the CRA on your behalf

    Peace of Mind, Anywhere in the World

    Whether you’re in Europe, Asia, or South America, we’re just a click or call away. Our secure, cloud-based tools make it easy to work with us from anywhere — ensuring timely filings and full compliance with Canadian tax law.
    Contact Us Now to Get Started

    Don’t Let Taxes Follow You the Wrong Way

    Being a Canadian expat comes with exciting new adventures — and complicated tax responsibilities. At Accounting Montreal, our goal is to help you manage your Canadian taxes with confidence and clarity. With the right guidance, you can stay compliant, avoid penalties, and protect your global income.

    Need help with your expat taxes?

    Contact Accounting Montreal today to schedule a consultation with our expat tax experts. We’re here to simplify your international tax journey.

    CONTACT US NOW