Know How to File Your Departure Return, Report Worldwide Income, and Avoid Double Taxation
Leaving Canada for work, retirement, or relocation doesn’t end your tax obligations immediately.
At Sunrise Chartered Professional Accountant, we help emigrants and non-residents understand how to file a departure return, calculate their final tax owing, and stay compliant with CRA requirements while protecting against double taxation.
When You’re Considered an Emigrant
- You become a non-resident of Canada for tax purposes when you sever residential ties, such as:
- Selling or renting your Canadian home
- Moving your spouse and dependents abroad
- Establishing significant ties in another country
- The date you leave Canada permanently is your emigration date for tax purposes.
Your Departure (Final) Tax Return Must Include
- A T1 General “Departure Return” covering income earned from January 1 to your departure date
- Reporting of worldwide income up to the date you became a non-resident
- Disclosure of deemed dispositions (capital gains on property you own when leaving)
- Declaration of foreign property worth over $25,000 CAD using Form T1161 (List of Properties by an Emigrant)
- Form T1243 if you have deemed dispositions resulting in gains or losses
Key Filing Deadlines
- Departure Return Due: April 30 of the year following your departure (or June 15 if self-employed)
- Balance Owing Deadline: April 30 — interest applies on unpaid balances after this date
Income You Must Report
- Employment and self-employment income earned in Canada before leaving
- Investment, pension, and rental income earned while a resident
- Worldwide income up to your departure date (foreign salary, dividends, or gains)
After you leave, only Canadian-source income (e.g., rental, pension, or investments) is taxable in Canada — usually subject to non-resident withholding tax.
Avoid Double Taxation
- Canada has tax treaties with many countries to prevent double taxation.
- Claim foreign tax credits for taxes paid abroad on the same income.
- Consult a CPA before departure to plan residency timing and asset transfers strategically.
Property & Investments When Leaving
- You are considered to have sold (deemed disposition) of most capital property at fair market value when you emigrate.
- Certain assets like Canadian real estate, RRSPs, and pensions are excluded — tax applies when you actually sell or withdraw funds.
- You can elect to defer departure tax on deemed dispositions by posting security with CRA.
Non-Resident Filing Obligations
- If you continue earning Canadian income (e.g., rental, pension, dividends), you must file:
- Section 216 return for rental income
- NR4 slips for investment or pension payments
- Non-Resident Tax (Part XIII) withholding compliance
Do’s and Don’ts Before Leaving Canada
Do:
- Notify CRA of your departure date and new foreign address.
- File your departure return accurately with all forms (T1161, T1243).
- Review capital gains implications before transferring property.
- Keep RRSPs, TFSAs, and pensions organized — some may have non-resident restrictions.
- Consult a CPA about tax treaty residency if moving to a country with dual-residency risk.
Don’t:
- Ignore CRA filing — penalties apply even if you leave the country.
- Assume your Canadian property is tax-free; check for deemed disposition.
- Withdraw RRSPs or pensions early without understanding non-resident withholding tax.
- File late — it may affect future re-entry or benefit eligibility.
How Sunrise CPA Can Help
At Sunrise Chartered Professional Accountant, we guide individuals and families through every step of the emigration process, including:
- Determining your residency status
- Preparing your departure return and related CRA forms
- Managing capital gains and foreign income reporting
- Advising on non-resident tax filing and treaty benefits
Whether you’re moving temporarily or permanently, our team ensures your transition is tax-efficient, compliant, and stress-free.