Hi James,
Here’s a clear answer to your question about your Canadian tax filing obligations as a non-resident:
Since you permanently left Canada in 2023 and filed an emigrant return reporting your date of departure, you became a non-resident for Canadian tax purposes effective that date.
Treatment of your Canadian bank interest as a non-resident:
- Interest income paid to a non-resident is generally subject to Canadian withholding tax at a rate of 25%, unless a tax treaty reduces the rate.
- However, there is an exemption under the Income Tax Act (subparagraph 212(1)(b)(ii)):
Interest paid by a Canadian financial institution (e.g., bank) to an arm’s length non- resident is exempt from withholding tax.
- This is why your bank is correctly issuing an NR4 slip reporting the interest but not withholding tax.
Do you have to file a Canadian non-resident return each year?
No, you are not required to file a Canadian non-resident income tax return solely because of this bank interest.
Here’s why:
- A Canadian tax return is required if you owe tax (e.g., if withholding tax was applied and you want to claim a refund, or you had taxable Canadian income beyond exempt interest).
- Your bank interest is exempt as described above.
- You have no other Canadian income (employment, rental, pension, etc.).
Bottom line:
✅ Your final tax obligations as an emigrant were satisfied when you filed your 2023 departure return.
✅ Going forward, you do not need to file an annual Canadian non-resident tax return just because you earn bank interest exempt from withholding tax.
✅ You can retain your NR4 slip for your records, but no action is needed.
Caution:
If your situation changes—for example, if you start earning rental income, sell taxable Canadian property, or receive pension payments—you may then have filing requirements.
If you’d like, I can help you prepare a short note to keep with your records confirming your filing position, in case the CRA ever asks.
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