Tax Return Preparation for Non-Residents in Canada Watch Video
Allan Madan, CPA, CA
Non-residents that have any connection (business, employment, investment, real estate) Read More…
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CPA, CA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
Can a non resident canadian gift money for property for his daughter in canada, what are the requirements for this.
Hi Sima,
As a non resident Canadian, you can gift money to your daughter in Canada, so that she can purchase a property in Canada. Your daughter will not be required to pay income tax on the gift received. However, you should speak with an accountant in your country of residence to see if there are any tax implications in your home country.
The source of funds should also be very clear, so that the Canada Revenue Agency does not mistake the gift as income. Therefore, you should keep a copy of your bank statement to show where the money originated from, as well as copies of tax returns to prove that you had the financial capacity to make the gift.
If your daughter will be on title to the property, she will be required to report the rental income from the property on her tax return, if any. For further information on this, please see http://madanca.com/how-to-prepare-tax-returns-for-rental-properties-in-canada
Allan
I had employment in Canada from January to April 2012, and had income tax deducted for that time period. I didn’t plan to leave Canada until I got a job offer from the States the end of April, and I moved out of Canada in May. I bought some RRSP earlier in March. Should I call the financial institution to cancel my RRSP contribution to year 2012? Or those can be used to reduce my income tax? May I get some advice please?
Hi Jasmine,
Thanks for the inquiry!
There are various situations you need to consider before making that decision. First of all, based on the limited information, you were a part-year resident and it will be able to use the RRSP as a deduction in order to reduce your income tax (or receive a larger refund).
However, in order to answer whether you should cancel it or not, we would need to know more on what your future plans are in terms of coming back to Canada (and/or possibly retiring here since that is the goal of the RRSPs). You can keep RRSPs as a non-resident so that’s not a problem but if you don’t plan on returning to Canada, there is no reason to continue contributing to your RRSP when you can easily contribute to an equivalent US 401(k) account.
– The team at Madan CA
Hi would like to know is there any obligation for a non-resident to bring a high-value gift into canada? (and also into USA too, for that matter). Thanks very much for your help.
Hi Jason.
You can import gifts for friends into Canada duty- and tax-free as long as each gift is valued at CAN$60 or less. If the gift is worth more than CAN$60, you will have to pay duty and taxes on the excess amount. You cannot claim alcoholic beverages, tobacco products or business-related material as gifts.
Goods that exceed the limit will be subject to duties. The term duties may include excise taxes and Goods and Services Tax/Harmonized Sales Tax (GST/HST). It does not include provincial or territorial sales tax. However, the CBSA may also collect provincial and territorial taxes, levies, and fees. Duty rates vary according to the goods you are importing, the country where the goods were made, and the country from which you are importing them.
-Allan and his team.
If I was a non-resident director of a Canadian company and only receive C$750 for attending a director meeting in Canada during a year, do I need to file return and pay tax as I am not entitled to any deduction or personal credits?
Hi May,
If you were a non resident and received directorship fees for $750, then you would not have to file a Canadian tax return, since you would not have any taxes owing. This is assuming that your employer correctly deducted taxes from the directors fees paid to you.
Thanks,
Allan Madan, CPA, CA
Tel: 905-268-0150
If i am a non-resident (i am also a Disabled Person) and had worked in vancouver, british columbia (Canada). Do i need to file and pay tax? is there any claim income tax refund if i am a Disabled Person? Please advice
Hi Zheng,
Thank you for your question. The answer to your question is as follows:
If your Canadian-sourced income is equal to 90% or more of your net world income, you will be able to claim all federal non-refundable tax credits. However, if it less than 90%, you will still be able to claim your disability tax credit, but only 15% of the credit.
To find out if the person with the disability may be eligible, answer the questions here: http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/dsblts/dtc/qstns/q1-eng.html. To be eligible for the Disability Tax Credit, a T2201 form must be filled out and a certified/qualified practitioner has to complete and certify that the taxpayer has severe and prolonged impairments and effects.
The CRA will validate the certificate and deem eligibility.
The taxpayer can possibly enroll in a Registered Disability Savings Plan.
Regards,
Hi Allan,
I see you’ve kept answering questions regardless of the fact that you posted this a few years ago so I will try my luck.
My father lives in Saudi Arabia where there are no tax laws. He has been supporting me for the past few years, but can these amounts be considered as a gift and not be taxable and therefore not make me a dependent? What is the difference between a gift and financial support? How can he go about giving me an allowance if he is a non-resident Canadian? Would it be better if an aunt who does not have the nationality to send it? Eventually, we would like to buy a house. When the sum is transferred to me, would I be taxed on it as if it is income?
Thank you, really appreciate your help,
Nathalie
May I know how much you charge to process the tax filing for real estate transaction for non canadian resident?
I am not familiar with the process and I have a friend who need that service.
Santoso
I am a non-resident Canadian. You stated “If your Canadian-sourced income is equal to 90% or more of your net world income, you will be able to claim all federal non-refundable tax credits.”
Would this also apply to Provincial non-refundable tax credits. In other words would I be able to claim the $11,138.00 personal exemption amount on line 300 ?
Hi Steven,
Thanks for your question. Yes, this also applies to to provincial tax credits for most provinces. Line 300 on Schedule 1 is for the Federal Basic Personal Amount. See form 428 for the provincial equivalent.
“Question : can a non resident, non citizen convert a RSSP to RRIF
and pay withholding tax based on the relevant tax treaty.”
hi Poutanen,
Yes
Hi Alan,
I have been deemed a non-resident in 2016 and during that time received a lump sum pension payout the first week of December 2016 from a former employer. I was taxed over 30%. I’m wondering if I can recoup some of the tax paid? If so how do I go about doing it? I was a resident of a treaty country (Turkey) and had no other Canadian income for the year but did work in Turkey.
Hi Kimberley, you can file a Section 217 return to recover the excess withholding tax deducted over your tax liability per Sec. 217.
Thanks very much for your response Alan, it’s very helpful. One last question.. Is it okay to file a section 217 return even if I’ve already filed my 2016 tax return?
Hi Kimberley, the section 217 return is prepared for non-residents of Canada. It would not make sense to have two tax filings for the same year, unless there is a valid reason.
Hi Madam:
I’m a non resident of Canada for tax purposes since July 2016 (I already got a paper from CRA about that).
In 2017; I made 2 RSRP withdrawals (one as non resident with 25%. And the second with 5% withholds) therefore I got 2 forms T4-RSP and NR4.
Beside I got also a t5 for dividends earning (I didn’t inform the dividend payer about my residency status yet).
Shall I file tax for 2017 incomes especially T4-RSP and t5? Or no need?
Thanks.
Hi Mohammed, since you are a non-resident of Canada, you do not need to file a non-resident tax return to report RRSP withdrawals or Canadian interest income received. Contact your financial institution because they should not have issued a T4-RSP, but should have issued a NR4 slip. Likewise, your financial institution should have issued a NR4 slip instead of a T5 slip.
Hi Alan
Thanks for a very informative article.
I am a non resident of Canada and last year I was working for three months for a company in Quebec and then returned to the UK. I was paid and taxed as if I was working a full year. I am now back in Canada this time working in Vancouver for the same company and I find that I have to send in a tax return. Given my tax was taken out of my pay at source last year can I expect a refund?
Thanks
Richard
Hi Richard, yes, you should get a refund. File a non-resident T1 return with the CRA.
Hi Allan,
thank you for your article. I have already received my Notice of Assessment and then Notice of Reassessment, but the thing is that for me as a non-resident they charged me federal tax + surtax of 48% of that federal tax instead of a combination of federal tax + provincial tax (I declared that all my income for 2017 came from Canada). My question is should I ask for another reassessment given that I found the information “When a non-resident or deemed resident files a Canadian tax return, they are taxed at the current federal tax rates, plus a surtax of 48% of the federal tax, unless income was earned from a business with a permanent establishment in Canada. In this case, provincial or territorial tax is paid on that income.”?) Can I claim non-refundable PROVINCIAL tax credits even though I am a non-resident? I worked for a Canadian company in BC.
Thank you!
Hi Allan,
thank you for your article. I have already received my Notice of Assessment and then Notice of Reassessment, but the thing is that for me as a non-resident they charged me federal tax + surtax of 48% of that federal tax instead of a combination of federal tax + provincial tax (I declared that all my income for 2017 came from Canada). My question is should I ask for another reassessment given that I found the information “When a non-resident or deemed resident files a Canadian tax return, they are taxed at the current federal tax rates, plus a surtax of 48% of the federal tax, unless income was earned from a business with a permanent establishment in Canada. In this case, provincial or territorial tax is paid on that income.”?) Can I claim non-refundable PROVINCIAL tax credits even though I am a non-resident? I worked for a Canadian company in BC.
Thank you!
Hello,
If you are a non-resident who worked for a company in BC and received a T4 slip (employment income slip), then you should pay federal and provincial (BC) income tax. The 48% surtax does not apply in your situation.
File a T1 adjustment and report the province of employment as BC to fix this error. I can help you with this if you require.
Hello, I need to claim my taxes for 2018. I lived in Istanbul Turkey during that tax period. I gave dual citizenship with Canada and Turkey. I am considered as factual resident in Canada because I have a driving licence and my father w my sister. so what documents do I need and how to apply?
Hi Duygu,
As a factual resident of Canada, you are taxable on your worldwide income. This means that any income that you earned in Turkey, will be taxable in Canada. However, to avoid double taxation, you can claim a foreign tax credit on your Canadian tax return for the foreign taxes paid. So that I can help you, please complete this checklist and return it to me by email. Please also provide details of your foreign income. http://madanca.com/t1-personal-tax-return-checklist/ Note that my email address is amadan@madanca.com
I need to add another property to my existing non resident account. This property is being rented though the building is not yet registered. it is being managed by a property management company. The rental started last January of this year. We pay interim payments for this property until the closing date which we don’t have yet. The rent hardly offsets the interim payment amount. January shows no income due to first month rent leasing fee charged by the Rental company plus interim occupancy payment.
I have already sent my NR6 form for the other property with post dated monthly remittances for 2020.
When should I add this new property to my non resident account? I was thinking of adding it on in
Oct/Nov,this year for 2021 tax year. I would very much appreciate your professional advice. Thank you
Hi Josie,
Since you have already submitted form NR6 for the 2020 year, I recommend that you add this property to form NR6 for the 2021 year, which you should submit to the CRA by October 2020.
I am a non resident of Canada. I am 73 yrs old. Receive OSS and CPP AS wll as income from a small annuity from Empire Life.
Do you do returns for individuals ?. If you do , i would appreciate you letting me know. I have been living in the Philippines for the last 6 years.
Hi David,
Thank you for your email. I do prepare tax returns for individuals. You do not need to file a tax return if you are a non-resident and your only source of income from Canada is Canadian pensions. The payer(s) of the pensions should deduct non-resident withholding taxes from the pension payments made to you. If you are a low-income earner, you can recover a portion of the taxes deducted by filing a Section 217 Tax Return for non-residents. This return is optional and I can prepare it for you.
Hi, I am a non-resident, leasing my original house in Canada from a Canadian rental manager. Please advise your detailed procedure and annual fixed costs for preparing and handling non-resident rental income tax return with withholding tax, etc. Thanks.
Hi Michael,
Thank you for your email. I can certainly help you. The fee to file a Section 216 Non-Resident Rental Return is $350 + disbursements. There is an additional $100 fee to prepare an NR4 Slip (Statement of Withholding Tax Remitted and Rents Collected). Please complete this checklist and return it to me by email: http://madanca.com/section-216-checklist/
Hi Allan,
I was a Canadian non-resident for the full year of 2023 living in the US. However, I received a 2023 T4 for Ontario because the company I previously worked at in 2021 went public and the stock options vested were reported as T4 employment income. This company does have business establishment in Ontario, but the CRA argued because I was a full non-resident for the full year, they taxed me for federal tax + 48% surtax instead of the federal tax + ON provincial tax. Is this correct or should I file a dispute? Thanks
Hi Henry,
Please check the T4 Slip. If the province of employment is “Ontario”, the surtax will not apply, and in this case, ensure that you enter the Province of Taxation as Ontario. If the province of employment is “Outside Canada”, the surtax will apply.