Impôts Ici
Tax residency and
international mobility
Moving to another country does not automatically change your tax residency. You may leave Canada and remain resident because important ties were kept, return after a temporary assignment, or become resident upon arriving even before your immigration status becomes permanent. In a cross-border file, the first question is therefore often the most important one: where are you resident for income tax purposes?
Impôts Ici assists Canadians leaving the country, newcomers, mobile employees, international entrepreneurs and families whose lives extend across more than one jurisdiction. We review the facts that determine your status, identify Canadian filing obligations, consider the risk of double taxation and prepare the steps required before or after the move.
International mobility requires
tax advice before the return is filed
Tax residency and international mobility
Determine your status before preparing your tax returns
Tax residency affects which income must be reported in Canada. A Canadian resident generally reports worldwide income, while a non-resident is usually taxed only on certain Canadian-source amounts. Between those two positions are several possible classifications, including factual resident, deemed resident, deemed non-resident and part-year resident.
The answer is not based solely on the number of days spent in Canada.
The analysis considers significant residential ties such as a home available in Canada, a spouse or common-law partner and dependants. Secondary ties, economic activity and the person’s connection to another country may also matter. When two countries both consider the individual resident, the tie-breaker rules in a tax treaty may determine the final result.
Tax residency and international mobility
Leaving Canada: plan for departure tax before you move
When an individual ceases to be resident in Canada, a departure-year return may be required. Certain property is treated as though it were sold at fair market value immediately before departure and reacquired for the same amount. This deemed disposition can create a capital gain even when no actual sale has occurred and is commonly referred to as departure tax.
Forms T1161, T1243 or T1244 may be relevant depending on the property held, its value and whether payment of the resulting tax is deferred. Public and private company shares, foreign property, business interests and some personal assets should be reviewed before the move. Planning ahead makes it possible to establish values, identify exclusions and prepare for any cash-flow impact.
Arriving in Canada: establish the right tax starting point
A newcomer must determine the date on which Canadian tax residency begins. That date affects the income included in the first return, the tax cost of property already owned, access to certain credits and future foreign reporting obligations.
Income earned before and after the arrival date is not necessarily treated in the same way.
The move may also create questions about foreign bank accounts, investments, interests in foreign corporations, pension plans or rental property located outside Canada.
Documenting the fair market value of assets and the chronology of the move at the outset can prevent later inconsistencies and make it easier to determine which forms will be required.
Temporary assignments, remote work and ties kept in Canada
Employees sent abroad, consultants, digital nomads and people working remotely across borders need to examine residency before assuming that their tax obligations have changed.
Living outside Canada for a limited period does not necessarily sever Canadian residential ties.
Keeping a home, a spouse or dependants in Canada, or maintaining other significant connections may support continued Canadian residency.
Remote work adds another layer. An individual may work for a Canadian employer while living abroad, or work for a foreign company from Canada. Residency, treaty provisions, payroll withholding and filing obligations in each country should be reviewed together rather than as separate questions.
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Cross-border situations reviewed
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Tax residency and international mobility
Forms and records to prepare
Residency files may involve several forms. NR73 can be submitted by a person leaving Canada who asks the Canada Revenue Agency for its opinion on residency status. NR74 is used in certain situations involving entry into Canada.
Forms T1161, T1243 and T1244 may be required when a departure involves reportable property, a deemed disposition or an election to defer payment.
The supporting file is just as important as the form. Useful records may include travel dates, leases, proof of a foreign home, employment contracts, immigration documents, bank and investment statements, property valuations, information about a spouse and dependants, and correspondence already sent to the tax authorities. Impôts Ici helps organize these facts into a consistent chronology.
Tax residency and international mobility
Support that brings the entire move into one tax file
International mobility is easier to manage when tax residency is addressed before departure or as soon as the person arrives. A clear position helps prevent contradictory returns, incorrect withholding, missed reporting and unnecessary double taxation.
Whether you are emigrating, immigrating, returning to Canada or working abroad temporarily, we can review the facts, prepare the required Canadian forms and coordinate with other advisors when another country is involved.
Before the first meeting, prepare a timeline showing the move dates, the country in which you expect to live, any Canadian home kept or sold, the location of your spouse and dependants, income earned in each country, property held and filings already made. This timeline often reveals whether the change in status is clear or whether a grey area needs stronger documentation.
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International tax residency with Impôts Ici
An incorrect residency position can affect several tax years. It can also change how Canadian income received after departure, foreign investments, retirement plans, real estate and reporting obligations are treated. Impôts Ici reviews these connected issues remotely and helps you determine whether the next step involves a departure-year return, a non-resident filing or the reporting of foreign assets and income before the consequences accumulate.