Do I need to notify the Canada Revenue Agency (CRA) about my departure?

When planning to move abroad or temporarily reside outside Canada, every resident faces an important question: do you need to notify the Canada Revenue Agency (CRA) about your change of residence? The answer to this question determines your tax obligations to the Canadian government, how you file your tax returns, whether you are eligible for benefits, and how to avoid double taxation. In this article, we will take a detailed look at who must notify the CRA of their departure and when, what procedures must be followed, how resident status for tax purposes is determined, and what consequences may arise if the rules are not followed.

Canadian tax resident: what it means and how it is determined

The CRA classifies a person as a tax resident when they maintain “substantial ties” to Canada. The main factors include:

  • having a home or family (spouse, children) in Canada
  • bank accounts and property
  • provincial health insurance

However, even a temporary stay abroad does not necessarily deprive you of your resident status if these ties remain. At the same time, physical presence in Canada for more than 183 days in a calendar year is also a significant criterion.

If, after moving, your “significant ties” are severed but “incidental ties” remain — such as a provincial driver's license, club memberships, or a rental property — the CRA may consider you a partial resident or non-resident, depending on your specific situation.

Obligation to notify the CRA of a change in status

When a person permanently leaves Canada and loses their tax resident status, they are required to notify the CRA. There is no official form for notifying the CRA of emigration, but at the end of the last tax return for the year in which the departure took place, you must:

  1. complete the section for non-residents
  2. indicate the date of change of residency status

The return for that year must be filed by April 30 of the following year, and for individuals who conducted business, by June.

In the case of temporary departure (e.g., for study or contract work) when “significant ties” to Canada are maintained, there is no need to formally notify the CRA. However, you should correctly mark the days of absence and file a complete resident return, declaring your actual income in Canada and abroad.

How to calculate taxes in the year of departure

The year of departure is special because you are only a tax resident for the period from the beginning of the year to the date of departure. After that, income from Canadian sources is taxed as non-resident income. To allocate income correctly, you must:

  • indicate the date of departure
  • summarize all sources of income up to that date separately

Standard personal deductions, such as the basic tax credit, apply in proportion to the period of residence.

Income received after departure (e.g., Canadian pension or rental income from real estate) is subject to withholding tax at the source of payment. The CRA applies a standard rate of 25% without credits, unless a special double taxation agreement has been concluded.

Double taxation agreements

Canada has numerous bilateral double taxation agreements with many countries. These agreements allow you to avoid paying tax twice on the same income. After leaving, it is advisable to study the provisions of the relevant agreement in order to:

  • pay tax at a reduced rate

  • or not pay certain types of income in Canada at all

The CRA requires you to attach a copy of your certificate of residence issued by the tax authorities of your country of residence to confirm your status and take advantage of the benefits.

Consequences of non-reporting and late reporting

If a taxpayer does not report their departure on their tax return, the CRA may:

  • impose penalties for failure to file a return
  • impose late payment penalties

In addition, a non-resident who is recognized as a resident based on incorrect information may lose their entitlement to personal tax credits, medical and family benefits. Restoring the correct status will require submitting a request for review and providing documentary evidence of the change of residence.

Practical recommendations

To ensure a smooth transition to non-resident status, you should:

  1. Gather all information about your departure date, changes in personal relationships, and sources of income in advance.

  2. Consult with a tax lawyer or accountant before filing your last Canadian tax return.

  3. If you are moving to a country with a double taxation agreement, contact the tax authorities of your new country for a certificate of residence.

Conclusion

Notifying the CRA of your departure from Canada is only necessary if you lose your tax residency, which is officially recorded in your last tax return for the year of departure. Accurate determination of the date of departure, separation of income before and after the change of status, and use of the provisions of double taxation agreements will help minimize tax expenses and avoid penalties. A systematic approach and consultation with professionals will ensure a smooth transition to your new place of residence without unwanted tax consequences.