Non-Resident Tax Obligations

The question of whether or not a person is a "resident of Canada " is an important one for a number of matters dealing with Income Tax. Withholding requirements are imposed on people buying or renting certain property (including real estate) from sellers who are "non-resident of Canada ". It is important to enquire whenever buying real property or business interests or renting property from a person. If the seller or landlord is non-resident of Canada and has not remitted the tax due and obtained a "Clearance Certificate", one third the price of non-depreciable property, one half the price of depreciable property, or one quarter of the rent must be withheld by the buyer or tenant and remitted to Canada Customs and Revenue Agency (CCRA). A Clearance Certificate must be provided by the seller, or an undertaking provided by the rental agent.

Who is a non-resident of Canada?

As a rule, someone is non-resident of Canada if they:

People are deemed to be resident of Canada if they spend a total of 183 days or more in Canada during a calendar year and are not a resident of another country under a tax treaty with Canada.

Someone who has left Canada may still be considered a resident of Canada , if they have a number of "residential ties". These include such considerations as:

While anyone or two of these things wouldn't necessarily make one a deemed Canadian resident, a number of them would tend to bring one within the provision.

What taxes do non-residents pay?

Non-residents of Canada are required to pay tax on their income earned in Canada . The following sorts of income do not require a return to be filed. Income is deducted at source and remitted to CCRA.

The usual rate of tax is 25% unless a tax treaty with the person's country of residence provides for a different rate.

Income Tax returns are required to be filed for the following types of income:

Non-Resident purchaser of real property in Canada tax implications

Return to Who Moves to Victoria