Do I Need to File Canadian Taxes After Leaving Canada? 

Last updated: Dec 13,  2025

One of the most common questions former residents ask after moving abroad is whether their Canadian tax obligations end immediately once they leave the country. The short answer is that they do not always end right away. Leaving Canada does not automatically eliminate the requirement to file a Canadian tax return. Whether a filing is required depends primarily on your tax residency status and whether you continue to earn Canadian-source income after your departure. 

Understanding Residency: The Starting Point 

Canada’s tax system is based on residency rather than citizenship. This means that even after physically leaving the country, an individual may still be considered a Canadian tax resident if they maintain significant residential ties. The Canada Revenue Agency evaluates residency based on a combination of factors, including whether you have a home available for your use in Canada, whether your spouse or dependents remain in the country, and whether you continue to maintain social or economic connections.

Once you are determined to be a non-resident for Canadian tax purposes, Canada’s ability to tax you becomes limited. At that point, Canadian taxation generally applies only to specific types of income that have a Canadian source. Because residency determinations are highly fact-specific, this is often where taxpayers either file unnecessarily or fail to meet ongoing obligations.

Scenario 1: You Left Canada and Have No Canadian-Source Income 

If you have become a non-resident of Canada and do not earn any Canadian-source income after leaving, you generally are not required to file a Canadian tax return on an ongoing basis. This situation commonly applies to individuals who no longer own property in Canada, do not receive Canadian pensions or investment income, and do not earn employment or business income connected to Canada.

Despite this, many former residents continue filing Canadian returns out of caution or uncertainty. In some cases, this results in unnecessary compliance costs and continued reporting obligations that could have been avoided with a proper residency review.

Scenario 2: You Own Rental Property in Canada

Former residents who continue to earn rental income from Canadian real estate usually have ongoing Canadian tax obligations. As a non-resident, rental income is subject to a withholding tax, generally calculated at 25% of the gross rent collected. This withholding is often remitted monthly unless a waiver has been approved.

To avoid being taxed on gross income, many non-residents choose to file a return under Section 216 of the Income Tax Act. This allows rental income to be reported on a net basis, taking into account deductible expenses, and often results in a lower overall tax liability. While filing under Section 216 is optional, it is frequently beneficial and commonly overlooked.

Scenario 3: You Receive Canadian Pension or Registered Plan Income 

Certain types of Canadian-source income remain taxable even after you become a non-resident. This includes Canada Pension Plan benefits, Old Age Security payments, and withdrawals from registered plans such as RRSPs or RRIFs. In these situations, tax is typically withheld at source by the payer.

In some cases, non-residents may file a Section 217 return to calculate tax based on their total Canadian income, which can allow them to recover excess withholding. Tax treaties may also reduce the rate of withholding or change how this income is taxed. Without proper planning, individuals often pay more tax than necessary on these income streams.

Scenario 4: You Continue Working or Operating a Business in Canada 

If you continue to earn employment income for services performed in Canada or operate a business with income sourced to Canada, a Canadian filing obligation may still exist even after you become a non-resident. The tax treatment in these cases depends on where the work is physically performed, whether a permanent establishment exists in Canada, and how the applicable tax treaty applies.

These situations are particularly common for cross-border consultants, remote workers, and professionals who maintain Canadian clients. Incorrect assumptions in this area can lead to unexpected tax exposure or compliance issues.

What If You Moved to the United States or Another Country?

When an individual moves to the United States or another country with which Canada has a tax treaty, Canadian tax obligations must be reviewed alongside foreign filing requirements. Treaty residency tie-breaker rules may determine which country has the primary right to tax certain types of income, but this does not automatically eliminate Canadian reporting obligations.

In many cases, individuals are required to file tax returns in both countries, using foreign tax credits and treaty provisions to prevent double taxation. Coordinating filings across jurisdictions is essential to ensure compliance while minimizing overall tax liability.

A Common (and Costly) Mistake 

A frequent misconception among former residents is that leaving Canada automatically ends all Canadian tax obligations. In reality, both over-filing and under-filing are common. Some individuals continue filing full Canadian resident returns unnecessarily, while others fail to file required non-resident returns and later face penalties, interest, or reassessments.

Both outcomes are usually the result of an incorrect or incomplete residency analysis at the time of departure.

Final Thoughts

Leaving Canada is more than a physical move it represents a shift in how and where you are taxed. Whether a Canadian tax return is still required after departure depends on your residency status, the nature of your ongoing income, and how tax treaties apply to your situation. For individuals with cross-border ties, addressing these issues early can prevent years of incorrect filings and unnecessary costs.