Who this is for
- Individuals who owe the CRA personal income tax and have moved abroad
- Individuals with a CRA balance owing who are about to leave Canada
Not covered here
- Business GST/HST, payroll or corporate tax debts
- Departure tax amounts and posting security to defer them
- Québec provincial income tax, which Revenu Québec collects under its own rules
- Taxpayer relief and objections in depth
Does a CRA debt expire or go away if you leave Canada?
No. Moving abroad neither cancels a CRA tax debt nor runs out the clock on it. The CRA normally has 10 years to collect, but every day you are a non-resident is added to that period if you were resident when it began (Income Tax Act s. 222(8)(c)). Interest keeps compounding daily the whole time.
What makes a case not simple:
- You still have assets or income in Canada. Bank accounts, property, wages, pensions and refunds can all be reached.
- You live in a country whose treaty with Canada includes collection help. Some treaties, including the US treaty, let the CRA ask the local tax authority to collect.
- You are leaving with tax unpaid. The CRA can demand everything at once.
- You dispute the amount or have unfiled years. These change what is owed and when collection can start.
Gather: every notice of assessment, the CRA statement of account (in My Account; see CRA My Account from outside Canada), a list of your Canadian assets and of anyone in Canada who pays you, and your departure date.
Can the CRA demand everything at once because you are leaving?
Yes. If the CRA suspects you have left or are about to leave Canada, it can demand immediate payment of all taxes, interest and penalties, even amounts not yet due, by notice served personally or by registered letter to your latest known address (s. 226(1)). If you do not pay, it can seize your goods (s. 226(2); IC98-1R8).
A demand like this is a collection step, not a new tax. Departure tax itself, and posting security to defer it, is covered in deferring departure tax.
How long can the CRA collect, and why do non-resident years not count?
The collection period is 10 years, starting 90 days after the last notice of assessment (or a section 226 demand) is sent (s. 222(4)). Several events extend or restart it.
| Event | Effect on the period | Rule |
|---|---|---|
| You are non-resident, having been resident when the period began | Days abroad are added to the end | s. 222(8)(c) |
| You make any payment toward the debt, even a cheque that bounces | Period restarts in full | s. 222(5)(a), (6)(c) |
| You promise in writing to pay, or acknowledge the debt in writing | Period restarts in full | s. 222(5)(a), (6)(a)–(b) |
| The CRA starts a collection action (for example a garnishment or set-off) | Period restarts in full | s. 222(1), (5)(b) |
| Collection is barred while an objection or appeal is pending | Those days are added | s. 222(8)(a) |
| The CRA holds security instead of payment | Those days are added | s. 222(8)(b) |
An acknowledgement by your representative counts as yours (s. 222(7)). So a debt left unpaid while you live abroad can stay collectible long after ten years have passed.
What can the CRA take while you live abroad?
Anything in Canada, or owed to you from Canada. The CRA's collection tools work on assets and payers in Canada, wherever you live (IC98-1R8).
| What | How the CRA reaches it |
|---|---|
| Canadian bank and investment accounts | Garnishment: the institution pays the CRA instead of you (s. 224) |
| Wages, fees, rent, pension, or amounts your own Canadian corporation owes you | Garnishment of amounts the payer owes you now or within a year (s. 224(1)) |
| Tax refunds, GST/HST credits and federal benefit payments | Set-off against the debt: refunds under s. 164(2); other federal payments under s. 224.1 and the CRA's set-off policy (IC98-1R8) |
| Property and other assets in Canada | A certificate registered in Federal Court that can become a charge on property (s. 223), or seizure and sale of goods (s. 225) |
Set-off can happen even while you object to or appeal the debt (IC98-1R8), but not while any return the CRA knows you must file is still unfiled (s. 164(2.01)). Why a refund was held is explained in tax refunds as a non-resident; benefits kept after leaving are in left Canada without telling the CRA.
Giving property, or selling it for less than it is worth, to your spouse or common-law partner, a child under 18 or anyone else not at arm's length with you does not put it out of reach: that person becomes liable with you for what you owed for the year of the transfer and earlier years, up to the value they received for free (s. 160(1)). A transfer to a separated spouse or partner under a written separation agreement or court order is excepted (s. 160(4)). An assessment of that person also restarts your collection period (s. 222(5)(c)).
Can the CRA ask your new country to collect?
Sometimes. Canada has collection-assistance agreements in some tax treaties, and the CRA says that if you leave without resolving your debts it may ask that country for help (IC98-1R8). Check your new country's treaty with Canada for an assistance-in-collection article; not every treaty has one.
Under the Canada–US treaty, Article XXVI A:
- The debt must be finally determined: your rights to stop collection in Canada (objection, appeal) have lapsed or been used up.
- The IRS gives no help to the extent you show the debt relates to a period when you were a US citizen, or, if you became a US citizen before November 9, 1995 and still are, any period that ended before that date (paragraph 8).
Does interest keep running, and at what rate?
Yes. Interest on unpaid tax is compounded daily from the day after the balance was due until it is paid in full (s. 161; s. 248(11); T4058). From October to December the rate is 7% a year. The CRA resets it every quarter, so check the current rate before you pay (CRA rates).
Interest also applies to penalties and keeps running until the debt is paid in full, including while you pay under an arrangement or a postponement (IC98-1R8).
How do you pay the CRA from abroad or set up a payment arrangement?
If you kept a Canadian bank or credit union account, pay as a resident would: through its online banking, through the CRA's My Payment with an eligible Canadian debit card, or by pre-authorized debit set up in My Account (T4058). Without a Canadian account, pay in Canadian dollars by wire transfer, international money order, a bank draft drawn on a Canadian bank, or an internationally issued credit card through a third-party service for a fee (same source).
For a wire, the CRA's non-resident wire instructions require:
- Your social insurance number or non-resident account number, full legal name, phone number and the tax year.
- The authorization number and your CRA account number in the description field, exactly as the CRA page shows.
- "OUR" in the charges field, so your bank's fee is not taken out of the payment. A short payment leaves a balance that keeps earning interest.
If you cannot pay in full, set up a payment arrangement: schedule pre-authorized debits in My Account, or call the CRA (CRA: payment arrangements). You must file all future returns on time while it runs. For a personal income tax debt, call 1-888-863-8657 from Canada or the US, or 1-613-221-3002 from anywhere else, 8 am to 8 pm Eastern time on weekdays (CRA: contact us about your debt). If you have a letter from a collections officer, call the number in it. The CRA considers arrangements based on your ability to pay, after you have tried reasonable options such as borrowing, and asks for proof of income, expenses, assets and liabilities (IC98-1R8). Each payment restarts the collection period. Business and GST/HST debts are covered in CRA payment arrangements for business debt.
Can penalties and interest be reduced, and what if you dispute the amount?
The CRA can cancel or waive penalties and interest under taxpayer relief, looking back 10 calendar years: interest that accrued in that window, and penalties for tax years that ended in it. The tax itself is not forgiven. See penalties, interest and relief for how to ask.
If you think the assessment is wrong, file an objection by the later of 90 days after the date on the notice and 1 year after the return's filing deadline (s. 165(1)); the clock runs from the notice date, not the day you read it abroad. While it is pending, the CRA generally cannot take most collection steps on the amount you dispute until 90 days after it decides the objection (s. 225.1(2)). This does not cover amounts you do not dispute or a demand made because the CRA thinks you are leaving Canada (s. 226(1)), and a court can lift the bar if waiting would put collection at risk (s. 225.2(2)). Interest keeps running, and refunds can still be set off. How to object from abroad and late objections are in CRA letters while living abroad; reassessment limits are in how far back the CRA can reassess.
Example
These examples are illustrative; figures are in Canadian dollars.
The clock stops while abroad
Nadia's assessment shows C$18,000 owing. She stays in Canada two years after the collection period begins, then moves abroad.
- Years 1–2 in Canada: two of the ten years run.
- Years 3–9 abroad: none of those days count, because she was resident when the period began.
- Year 10, she returns: about eight years of the period are still left, and the balance has grown with daily compound interest.
A refund set off, then treaty help
Victor lives in the US and owes C$5,000. A later Canadian return produces a C$700 refund, which the CRA applies to his debt, leaving C$4,300 plus interest. Once the debt is finally determined, the CRA may ask the IRS for collection help, unless Victor shows the debt relates to a period when he was a US citizen.
A payment plan from abroad
Ruth lives in Spain and owes C$12,000 she cannot pay at once. She sends the CRA proof of her income, expenses, assets and debts, and proposes C$1,000 a month. She pays each instalment by wire in Canadian dollars with "OUR" in the charges field. She can also ask for relief on part of the interest; the CRA grants it only in limited situations, so it is not automatic.
Different for you?
- You owe the CRA and still have property, accounts or income in Canada: the CRA can collect from these wherever you live; get cross-border tax help.
- You are leaving with tax unpaid, or owe departure tax: see leaving Canada and deferring departure tax, and get cross-border tax help.
- Your new country's tax authority contacted you about a Canadian debt: get cross-border tax help before you answer.
- You have years you never filed: see non-resident Canadian returns and catch-up.
- The CRA still treats you as resident or says you owe back benefits: see left Canada without telling the CRA.
- The debt is GST/HST or corporate tax: see CRA payment arrangements for business debt.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| Income Tax Act collection period for any amount payable under the Act Begins 90 days after the last notice of assessment is sent (s. 222(4)); restarts on a written acknowledgment, a payment, a CRA collection action or an assessment of another person (s. 222(5)); extended by listed events (s. 222(8)) | 10 years | Income Tax Act, section 222 Checked |
| Income Tax Act collection holdback period Collection steps on an assessed amount are barred until 90 days after the notice of assessment (s. 225.1(1.1)(c)); on an objection, until 90 days after the CRA confirms or varies the assessment (s. 225.1(2)); does not apply to amounts required to be deducted and remitted (s. 225.1(6)) | 90 days | Income Tax Act, section 225.1 Checked |
| CRA interest rate on overdue income tax, CPP and EI amounts, fourth calendar quarter Annual rate in effect from October 1 to December 31, 2026; the CRA resets it every calendar quarter | 7% Tax year 2026 | CRA: Interest rates for the fourth calendar quarter Checked |
| Look-back for CRA cancellation or waiver of penalties and interest Penalties: a taxpayer has 10 years from the end of the calendar year in which the tax year ended (a 2015 request reaches 2005 and later years). Interest: interest that accrued within the last 10 calendar years (a 2015 request reaches interest from January 1, 2005). The window rolls forward every January 1. | 10 calendar years | CRA: Time limit to request cancellation or waiver of penalties and interest Checked |
| T1 objection period after assessment notice An individual can object by the later of this date after the assessment notice date or one year after the filing deadline | 90 days | CRA: Objection rights under the Income Tax Act Checked |
| T1 objection period after filing deadline An individual can object by the later of this date after the filing deadline or 90 days after the assessment notice date | 1 year | CRA: Objection rights under the Income Tax Act Checked |
Primary sources
- Income Tax Act, section 222: limitation period for collection
- Income Tax Act, section 226: taxpayer leaving Canada
- Income Tax Act, section 225.1: collection restrictions
- Income Tax Act, section 224: garnishment
- Income Tax Act, section 164: refunds applied to other debts
- Income Tax Act, section 224.1: set-off of federal payments
- Income Tax Act, section 225.2: jeopardy collection
- Income Tax Act, section 160: property transferred not at arm's length
- Income Tax Act, section 165: objections
- CRA: Payment arrangements
- CRA: Contact the CRA about your debt
- Income Tax Act, section 223: certificates and charges on property
- Income Tax Act, section 225: seizure of goods
- Income Tax Act, section 161: interest on unpaid tax
- Income Tax Act, section 248: interest compounded daily
- CRA: IC98-1R8 Tax collections policies
- Finance Canada: Canada–US tax convention, Article XXVI A
- CRA: Guide T4058, Non-residents and income tax
- CRA: Pay by wire transfer, non-residents
About this guide
Published by Cloud Accounting under standing professional approval. This version has no separately recorded personal review. It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.