Non-Resident Tax Accountant in Toronto

No. A non-resident does not automatically file the same Canadian return as a Canadian resident every year. Whether a return is required depends on the type of Canadian-source income or transaction involved. Employment or business income earned in Canada, taxable capital gains from certain Canadian property and other Part I income can create filing requirements. Some income subject to Part XIII withholding may instead have withholding as the final Canadian tax, although specific elections such as Section 216 or Section 217 may be available in qualifying situations.

Non-residents can be subject to Canadian tax on applicable Canadian-source income. Depending on the circumstances, this can include Canadian employment or business income, rental income from Canadian real estate, certain pension and retirement payments, dividends, taxable gains from taxable Canadian property and other amounts paid from Canadian sources. Different types of income can be subject to different withholding, filing and treaty rules.

Part XIII tax generally applies to certain Canadian-source amounts paid or credited to non-residents, such as some dividends, rents, pensions, RRSP or RRIF withdrawals and similar payments. The statutory withholding rate is generally 25%, although an applicable Canadian tax treaty may reduce the rate for certain types of income. The correct treatment depends on both the type of payment and the recipient's country of residence.

When a non-resident receives rent from Canadian real or immovable property, the payer or Canadian agent generally withholds non-resident tax equal to 25% of the gross rental income. A non-resident may elect under Section 216 to report the Canadian rental income and eligible expenses. Depending on the results, this can result in tax being calculated on net rental income rather than simply leaving the gross withholding as the final Canadian tax position. Property matters can also be coordinated with our real estate tax accountant services .

Form NR6 is an undertaking used by a non-resident receiving Canadian rental income, together with a Canadian agent, to request CRA approval for withholding based on estimated net rental income instead of gross rent. The agent must continue withholding on gross rent until the CRA approves the NR6. Once approved, withholding can generally be based on the net rental amount. A corresponding Section 216 return then has to be filed according to the applicable filing rules.

Section 217 allows qualifying non-residents or part-year residents to elect to report certain Canadian-source income on a Canadian tax return. Eligible income can include items such as CPP or QPP benefits, OAS, many pension benefits and certain RRSP or RRIF amounts. The election can be beneficial where the tax calculated under Section 217 is less than the non-resident tax that would otherwise apply. Eligibility, deadlines and the taxpayer's world-income information must be reviewed before deciding whether to elect.

The sale of Canadian real estate by a non-resident can trigger special procedures under Section 116 of the Income Tax Act. Where the rules apply, the seller may need to notify the CRA of a proposed or completed disposition and request the appropriate certificate of compliance, commonly using Form T2062 or another applicable form. For an actual disposition that requires notification, the CRA generally requires notice no later than 10 days after the disposition. The purchaser may also have withholding responsibilities if the required certificate is not available.

The CRA provides an Income Tax and Benefit Return package for non-residents and deemed residents of Canada, commonly identified by the 5013-R form number. Whether this return package is appropriate depends on the taxpayer's residency category and the Canadian income being reported; not every non-resident uses the same filing approach. Read our 5013-R tax return guide for additional context.

Potentially. When an individual ceases to be a Canadian resident, Canada can treat certain property as though it was disposed of at fair market value immediately before departure. This deemed disposition can create a capital gain and what is commonly called departure tax. Important exceptions and special rules apply, so not every asset is treated in the same way. If an international move is being planned in advance, our Toronto tax planning services may also be relevant.

In some situations, yes. Canada's tax treaties with other countries can affect withholding rates, the taxation of certain income and which country has the primary right to tax particular amounts. Treaty treatment varies according to the country, income type and individual facts. If your Canadian non-resident situation is part of a broader international tax issue, our cross-border tax services cover wider Canada-to-international tax considerations.

Fees depend on the work required rather than one fixed amount for every non-resident taxpayer. The scope can vary depending on residency analysis, number of tax years, Canadian rental properties, Section 216 or Section 217 elections, property dispositions, business or employment income, withholding records, prior-year filings and CRA correspondence. Filing Taxes can review the circumstances first and provide a quote based on the services required. If the CRA has already contacted you, our CRA audit and review assistance may also be relevant.