Non-Resident Tax Return in Canada: Which One, and Catching Up

Do I need to file Canadian taxes if I live abroad?

Often no. A non-resident has to file a Canadian return for a year only if one of these applies (Income Tax Act s. 150):

• Canadian income tax is payable for the year (not counting non-resident withholding tax).
• You were a non-resident all year and had a taxable capital gain or disposed of taxable Canadian property, such as Canadian real estate, other than a narrow class of excluded dispositions.
• You still had a Home Buyers' Plan or Lifelong Learning Plan balance at year end.
• The CRA sent you a demand to file. A demand applies whether or not you owe tax.

You may also file to claim a refund. If the CRA approved your Form NR6 (rent) or NR5 (pension) for the year, you must file the matching section 216 or 217 return (Guide T4058). If you receive Old Age Security, you also file the OAS Return of Income (Form T1136) by April 30 each year unless the CRA's exception for your country of residence applies; filing on time helps keep the pension from being suspended (CRA: OAS Return of Income). See pension and RRSP income.

Canada taxes a non-resident's income under the regular rules only when the person was employed in Canada, carried on business in Canada, or disposed of taxable Canadian property (s. 2(3)). Most other Canadian income, such as dividends, pensions and rent, is taxed by withholding at source instead.

A case stops being simple when you work from abroad for Canadian payers, sell Canadian property, have several unfiled years, or also file in another country. This page assumes your non-resident status is settled; if it is not, start with Canadian tax residency. For the year you left, see leaving Canada.

Gather first: every NR4, T4, T4A and T4A-NR slip, the dates you worked in Canada and abroad, and every CRA letter.

Which Canadian income is settled by withholding, and which needs a return?

Non-resident tax withheld from passive income is generally your final Canadian tax on it. The default rate is 25%, and a tax treaty may lower it (Guide T4058). Work, business and property sales go on a return.

Non-resident tax is not refunded by filing a regular return. Only the section 216 and section 217 elections, or Form NR7-R for over-withholding, can bring some of it back (CRA: Non-residents of Canada; Guide T4058).

Which non-resident tax return or package do I use, and when is it due?

The package depends on the income, not on where you live (CRA: Non-residents of Canada).

If you have to pay Quebec provincial tax, you also file a Revenu Québec return (Guide T4058).

The return is due April 30 of the following year, or June 15 if you or your cohabiting spouse or common-law partner carried on a business in the year (s. 150(1)(d); the CRA page says a business in Canada, but the Act does not limit it). Any balance owing is due April 30 either way (CRA). A section 217 return is due by June 30 of the following year, and the CRA cannot accept a later election (s. 217(2); CRA: section 217 due dates). A section 216 return is due within two years after the year ends, or within six months with an approved NR6 (s. 216(1)).

I work from abroad for a Canadian employer or clients: does Canada tax that pay?

Generally, Canada taxes a non-resident's employment income only for duties performed in Canada, and business income only from a business carried on in Canada (s. 115(1)). Pay for work physically done abroad generally falls outside that, even when the payer is Canadian, subject to the exceptions below and your treaty. Pay received after you left for work done while you lived in Canada, such as a bonus, vacation pay or a stock option benefit, may still need reporting (s. 115(1)(a)(i); Guide T4058).

The exceptions are in s. 115(2). The one remote workers meet most: you left Canada in an earlier year, a Canadian resident pays your salary, and a tax treaty exempts that salary from tax in your country of residence. Canada then taxes it, and Guide T4058 says to report employment income from a Canadian resident for work abroad only in that case. Even then, pay for work abroad that another country taxes is left out, as is some pay for selling or providing services in the employer's ordinary business (s. 115(2)(e)). Other exceptions cover signing payments for services to be performed in Canada and some students and researchers. Whether an exception applies, or whether serving Canadian clients from abroad amounts to carrying on business in Canada, depends on the facts and the treaty; get it reviewed rather than assume.

T4A vs T4A-NR for a non-resident. A T4A-NR reports fees paid to a non-resident for services performed in Canada outside employment. The payer withholds 15%, which is a prepayment, not the final tax: you file a return to settle it or get the excess back (Guide RC4445). Non-resident employees working in Canada get a T4 instead.

The slip type does not decide whether Canada taxes the pay; where you did the work does. If you received a T4A or T4 for work done entirely abroad, keep proof of where you worked, ask the payer whether the slip should be corrected, and, if Canadian tax was withheld, file a return to claim it. For an employee neither employed nor resident in Canada, the payroll rules allow withholding only on the s. 115(2) pay above or pay for duties in Canada (Income Tax Regulations s. 104(2)), so ask the employer to stop. For a payer withholding from a business's service fees, see withholding on services in Canada.

I received a Canadian scholarship or grant after moving abroad: do I file?

Only in certain cases. A non-resident reports the taxable part of a Canadian scholarship, fellowship, bursary or research grant if, in the year, the person (s. 115(2); Guide T4058):

• studied full time at a Canadian university, college or other post-secondary institution, or
• left Canada in an earlier year to study or teach at a post-secondary institution abroad, or
• left Canada in an earlier year to do research under a grant.

Outside these cases, the scholarship is not on the list of income Canada taxes a non-resident on. A researcher may deduct some expenses and report the net amount.

A Canadian payer withheld too much: do I file a return or Form NR7-R?

It depends on which tax was withheld.

The NR7-R limit is in s. 227(6) and Guide T4058. Ask the payer to apply the treaty rate going forward, so the problem does not repeat.

How do I file Canadian taxes from overseas and pay without a Canadian bank account?

A paper return mailed to the tax centre that Guide T4058 lists for your country always works. The CRA says it is temporarily accepting non-resident returns by fax because of international mail delays (CRA: Non-residents of Canada).

Electronic filing is limited. The preparer service, EFILE, excludes non-resident returns except certain section 116 returns for property sales (CRA: EFILE). The NETFILE page excludes deemed residents and lists many forms and amounts it cannot take; check that list before planning to file online.

To pay without a Canadian bank account, the CRA accepts a wire transfer in Canadian dollars, an international money order, a bank draft drawn on a Canadian bank, or an internationally issued credit card through a third-party provider for a fee (Guide T4058). For a wire, include your non-resident account number or social insurance number, full name, phone number and tax year, and make sure your bank does not deduct its fee from the amount, or the payment arrives short. After wiring, fax the bank's payment confirmation to the CRA as its wire page instructs (CRA: Pay by wire transfer).

I haven't filed Canadian taxes in years while living abroad: which years need a return?

File each year that had Canadian tax payable, a sale of taxable Canadian property, an HBP or LLP balance at year end, or a CRA demand, plus any year with a refund or election you still want. A year settled by withholding alone needs no return.

The penalty depends on tax unpaid at the due date, not on lateness alone. The usual late-filing penalty is 5% of the unpaid tax plus 1% for each complete month late, up to 12 months (s. 162(1)). A higher penalty can apply after a CRA demand if you were also penalized for late filing in any of the three preceding years (s. 162(2)). Compound daily interest runs on any unpaid balance (Guide T4058).

Before filing, list each year's Canadian slips and CRA letters, then file the years that owe tax or carry a refund, each on that year's own package (CRA: All personal income tax packages lists the last ten years). For relief from penalties and interest, which reaches back only ten calendar years (Guide T4058), see penalties, interest and relief; for coming forward on income left off returns already filed, see voluntary disclosure. Unfiled years from while you lived in Canada follow catching up on unfiled returns.

Can I still get refunds for old Canadian tax years?

Often, for income tax withheld on a T4 or T4A-NR: the CRA may refund an individual's overpayment if the return is filed within 10 calendar years after the end of the year (s. 164(1.5)). For a return filed more than three years after the year ends, the law says "may", so the refund is at the CRA's discretion. Older years are generally out of reach.

Non-resident tax follows shorter rules. Over-withholding is recoverable through Form NR7-R only within 2 years after the end of the calendar year the payer sent the tax to the CRA unless a treaty allows longer, and the elections close sooner: a section 217 return after June 30 of the following year, a section 216 return two years after the year ends (six months with an approved NR6). See the landlord and pension guides.

Example

These examples are illustrative, and all figures are in Canadian dollars.

Bank interest and dividends only

Sam lives in Ireland. His only Canadian income is C$1,200 of bank interest and C$3,000 of dividends. The interest, paid by an arm's-length bank, is generally exempt from withholding. Canada withholds non-resident tax on the dividends at the default rate unless the payer applies a lower treaty rate. With no other Canadian income, Sam generally needs no Canadian return. If the full default rate was taken when a treaty rate applied, he uses Form NR7-R, not a return.

A rented condo

Lin moved to Seattle and kept a Toronto condo rented at C$2,500 a month, or C$30,000 a year. The tenant or agent withholds non-resident tax on the gross rent unless the CRA approves an NR6 to withhold on net rent instead. The return she may file is the section 216 return, not a regular return, and an approved NR6 makes it required. See non-resident landlords.

Over-withheld pay, years later

A former working-holiday worker earned Canadian employment income in 2022 and left Canada at the end of that year. Her T4 shows C$2,000 more tax than she owed. She never filed.

• 2022: She files the return for the year she worked in Canada, by mail if needed. If she was resident until she left, it is the return for the year she left; see leaving Canada. Filed by the end of 2032, the CRA may refund the C$2,000.
• 2023 to 2025: Her only Canadian income is bank interest from an arm's-length bank. Generally, no return is needed.
• If a return shows a balance owing: She pays it by wire transfer in Canadian dollars, with her social insurance number in the payment details.

Different for you?

• You are not sure you are a non-resident: see Canadian tax residency.
• You never told the CRA you left, or the CRA says you are still resident: see left Canada without telling the CRA.
• This is the year you left, or departure tax applies: see leaving Canada.
• You rent out Canadian property: see non-resident landlords.
• You receive a pension, CPP, OAS, RRSP or RRIF payments: see the section 217 return guide.
• You withdraw from an RRSP, RRIF or TFSA after moving to the US: see RRSPs and TFSAs after leaving Canada.
• You still have a Home Buyers' Plan balance: see HBP balance when you leave Canada.
• You are selling Canadian real estate: see non-residents selling Canadian property and get cross-border tax help.
• You own a Canadian corporation: see non-resident owners of a Canadian corporation.
• You also file a US return: Canadian tax withheld or paid can count there; see foreign tax credit limits.
• You run a business from abroad with Canadian customers: for GST/HST, see non-resident and digital sellers; for income tax, get cross-border tax help.
• You have several unfiled years, work for Canadian payers from abroad, or file in another country too: get cross-border tax help.
• The unfiled years are from while you lived in Canada: see catching up on unfiled returns.