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What Happens If I Leave Canada?

Suppose you decide to take up a job in another country. Further suppose that this new country does not have any personal income taxes. Sounds like a great opportunity right? Well not necessarily.

Residency Must Be Severed

If you decide to leave Canada permanently and move to another country there are a number of factors the Canada Revenue Agency will look at to determine if you are no longer a Canadian resident for income tax purposes. If you leave Canada and it is determined that the move is only temporary, you will still be on the hook for Canadian income tax on your worldwide income. If you leave Canada but maintain a residence here, bank accounts, and have family ties, you may still be considered a resident.

Serving Ties

If you sever your ties to Canada and emigrate to another country permanently [1], then you are off the hook for annual income taxes. However when you leave there are implications from a tax perspective.

Leaving Canada permanently triggers a deemed disposition which means that you are deemed to have sold all of your assets on the date of your departure and re-acquired it. Therefore you must pay tax on any capital gains and income accrued to the date of your departure.

If you are considering leaving Canada, seek professional tax advice before departing to ensure that you have structured your departure to minimize the tax implications.

See CRA – Leaving Canada (emigrants)