What Happens to Your RRSP When You Leave Canada?

Last updated: Dec 15,  2025

When Canadians move abroad and become non-residents for tax purposes, one of the most common concerns is what happens to their Registered Retirement Savings Plan (RRSP). Unlike many other assets, an RRSP does not trigger immediate tax simply because you leave Canada- but it does come with important ongoing tax and planning implications.

Understanding how RRSPs are treated after emigration is essential for avoiding unexpected withholding tax, reporting errors, and missed planning opportunities.

Do You Have to Close Your RRSP When You Leave Canada? 

No. You are not required to close your RRSP when you leave Canada. An RRSP can remain in place after you become a non-resident, and the account can continue to hold investments and grow on a tax-deferred basis under Canadian tax rules.

Many individuals keep their RRSPs intact after leaving Canada, particularly if they plan to retire later or expect to return in the future.

Is Your RRSP Subject to Canadian Departure Tax? 

No. RRSPs are excluded from Canadian departure tax. When you leave Canada and become a non-resident, Canada does not impose a deemed disposition or immediate tax on the value of your RRSP.

This exemption is significant, as most non-registered investments are subject to departure tax, while registered retirement plans are not.

Can You Keep Contributing to Your RRSP as a Non-Resident?

In most cases, no new RRSP contributions can be made after you become a non-resident, even if you still have unused contribution room. RRSP contribution room generally requires Canadian earned income and Canadian tax residency.

While the account can remain open and invested, contribution activity typically stops once residency ends.

How Are RRSP Withdrawals Taxed After You Leave Canada?

Once you are a non-resident, RRSP withdrawals are subject to Canadian non-resident withholding tax. The default withholding rate is generally 25% of the gross withdrawal, although this rate may be reduced under an applicable tax treaty.

For example, under the Canada–U.S. tax treaty, RRSP withdrawals to U.S. residents are typically subject to 15% withholding rather than 25%.

The tax withheld is usually considered final Canadian tax, meaning no Canadian tax return is required in many cases. However, the income must still be reported in your country of residence.

What About RRIF Conversions After Leaving Canada?

Non-residents are permitted to convert an RRSP to a RRIF after leaving Canada. RRIF withdrawals are treated similarly to RRSP withdrawals and are subject to non-resident withholding tax.

For individuals nearing retirement, RRIF planning can still be relevant after emigration, particularly where treaty rates apply or where cash-flow planning is required.

Can You Recover or Reduce RRSP Withholding Tax?

In limited cases, yes. While RRSP withholding is often final, certain elections or treaty provisions may allow for tax relief or coordination with foreign tax credits in your new country of residence.

For example, RRSP withdrawals may qualify for foreign tax credits abroad, reducing or eliminating double taxation. Planning the timing and size of withdrawals can also significantly affect overall tax outcomes.

How Is Your RRSP Taxed in Your New Country of Residence?

The treatment of RRSP income outside Canada depends on the tax rules of your new country and the applicable tax treaty. Some countries recognize RRSPs as tax-deferred retirement plans, while others may tax growth or withdrawals differently.

For example, the Canada–U.S. tax treaty generally provides favorable treatment for RRSPs and RRIFs, but reporting obligations and timing rules still apply. In other jurisdictions, RRSP income may be taxed less favorably, making advance planning critical.

Should You Collapse Your RRSP Before Leaving Canada? 

Whether to withdraw or collapse an RRSP before leaving Canada is a case-by-case decision. Withdrawing while still a Canadian resident can result in higher marginal tax rates, while withdrawing as a non-resident may trigger withholding but offer better coordination with foreign tax credits.

Factors such as income levels, future residency, treaty protection, and retirement timelines all play a role. There is no one-size-fits-all answer.

Common Mistakes With RRSPs After Leaving Canada 

Common errors include assuming RRSPs are taxed on departure, withdrawing large lump sums without planning for withholding, failing to consider treaty rates, and misunderstanding how RRSP income is taxed in the new country of residence.

Another frequent issue is poor coordination between Canadian withholding and foreign tax reporting, which can lead to unnecessary double taxation.

Final Thoughts

Leaving Canada does not mean losing your RRSP or triggering immediate tax. However, RRSPs require careful planning once you become a non-resident. Understanding how withdrawals are taxed, how treaties apply, and how RRSP income interacts with foreign tax systems can make a significant difference over time.

For individuals leaving Canada with substantial RRSP balances, proactive planning before and after departure helps preserve retirement savings and avoid costly tax surprises.

Frequently Asked Questions (FAQs) 

Do I have to close my RRSP when I leave Canada? 

No. You are not required to close your RRSP when you leave Canada. An RRSP can remain open after you become a non-resident, and it can continue to grow on a tax-deferred basis under Canadian tax rules. 

Is my RRSP subject to Canadian departure tax?

No. RRSPs are excluded from Canadian departure tax. When you become a non-resident, Canada does not impose a deemed disposition or immediate tax on the value of your RRSP. 

Can I keep contributing to my RRSP after becoming a non-resident? 

In most cases, no. Once you become a non-resident, you generally cannot make new RRSP contributions, even if you have unused contribution room. Contribution eligibility typically requires Canadian tax residency and earned income. 

How are RRSP withdrawals taxed after I leave Canada? 

RRSP withdrawals made after you become a non-resident are subject to Canadian non-resident withholding tax. The standard withholding rate is 25%, but this rate may be reduced under an applicable tax treaty, such as the Canada–U.S. tax treaty. 

Is RRSP withholding tax final for non-residents? 

In most cases, yes. The tax withheld on RRSP withdrawals is generally considered final Canadian tax, meaning a Canadian tax return is not required. However, the income must usually be reported in your country of residence. 

Can I convert my RRSP to a RRIF after leaving Canada? 

Yes. Non-residents are allowed to convert an RRSP to a RRIF. RRIF withdrawals are subject to the same non-resident withholding tax rules as RRSP withdrawals. 

Does the Canada–U.S. tax treaty provide special treatment for RRSPs? 

Yes. The Canada–U.S. tax treaty generally provides favorable treatment for RRSPs and RRIFs, including reduced withholding rates and tax-deferred recognition in the United States. Proper reporting is still required in both countries. 

Should I withdraw my RRSP before leaving Canada? 

Whether to withdraw your RRSP before leaving Canada depends on your income level, future residency, treaty protection, and retirement plans. Withdrawing as a resident may result in higher marginal tax, while withdrawing as a non-resident may allow for treaty-reduced withholding and foreign tax credits. 

What are common RRSP mistakes people make after leaving Canada? 

Common mistakes include assuming RRSPs are taxed on departure, withdrawing large amounts without planning for withholding tax, misunderstanding treaty benefits, and failing to coordinate Canadian withholding with foreign tax reporting. 

Should I get professional advice before dealing with my RRSP after leaving Canada? 

Yes. RRSP planning for non-residents involves withholding tax, treaty analysis, and coordination with foreign tax systems. Professional advice can help avoid double taxation and preserve long-term retirement value.