Emigrating from canada with a cCPC

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Anonymous Posted 6 days ago MadanCA Team edited answer 7 hours ago

Hi,

I am an IT consultant incorporated in canada and currently in the process of moving abroad and I will continue to work part time with clients in Canada remotely.

I am moving to UAE (no income tax) and I want to declare non-residency to avoid income tax on global income.

After becoming a non-resident can I continue with a CCPC or do I have to change my corporation to a Non-CCPC?

What are the tax implications if I continue doing work through my Canadian corporation?

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score 0 · Answer 1 · 2025-08-25T13:56:07+00:00

Dear Emad,

Thank you for your question and for outlining your situation regarding your move to the UAE and continued work through your Canadian corporation.

As you’re planning to become a non-resident of Canada while maintaining business operations through your Canadian corporation, there are several important tax considerations you should be aware of:

1. Change in Personal Tax Residency

Once you cut your significant residential ties with Canada (e.g., home, spouse/dependents, social and economic ties), you may be considered a non-resident for Canadian tax purposes.

In the year you depart, you are required to file a T1 Departure Return, which includes:

Reporting your worldwide income earned up to your date of departure.
Declaring a deemed disposition (sale) of certain capital properties as of your departure date — including the shares of your Canadian corporation. This may trigger a departure tax on any unrealized capital gains on those shares (less your capital gains exemption, if applicable).

2. Loss of CCPC Status

Following your departure, your corporation may no longer qualify as a Canadian-Controlled Private Corporation (CCPC), since it would now be controlled by a non-resident. This loss of status can affect:

Small Business Deduction eligibility (which lowers the corporate tax rate)
Access to certain refundable tax credits, such as those on investment income
Eligibility for preferential treatment under the Canadian tax system

Despite losing CCPC status, your corporation may still be considered a Canadian tax resident, unless it is formally “continued” into another jurisdiction and managed/controlled abroad.

3. Ongoing Corporate Tax Compliance

If you continue operating the corporation in Canada after becoming a non-resident:

You must continue filing Canadian corporate tax returns (T2).
All income (including from Canadian and foreign clients) must be reported by the corporation.
Withdrawals from the corporation (e.g., dividends, salaries) may be subject to Part XIII withholding tax, depending on the structure.

If you eventually decide to continue (relocate) the corporation abroad, additional tax consequences will arise, such as:

Corporate departure tax on the deemed disposition of its assets
Loss of Canadian tax residency
Possible U.S. or international reporting obligations

✅ Next Steps

We strongly recommend booking a 30-minute consultation to go over:

Departure tax calculations on your corporate shares
Strategic options for retaining or winding up your corporation
Tax-efficient ways to withdraw retained earnings
Compliance steps to protect against double taxation

📅 You can schedule a session at your convenience:

Contact Us

💰 Fee: $140 + HST

Please let me know if you have any specific questions you’d like to address during the call.

Emigrating from canada with a cCPC

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