Hi Michèle,
Thank you for your question! You raise an important point about tax compliance when leaving Canada and living abroad.
1. Departure Tax & Residency Rules
When a Canadian taxpayer permanently leaves Canada, they may be considered a non-resident for tax purposes. This means they are required to:
✔ File a final tax return and report a deemed disposition of certain assets, which may trigger a departure tax (capital gains on assets like stocks, rental properties, etc.).
✔ Declare their non-resident status to the CRA to avoid being taxed as a Canadian resident on worldwide income.
2. Risks of Not Reporting Departure
While some individuals may attempt to keep a “low profile,” this is risky and not recommended. The CRA has multiple ways to track taxpayers, including:
✔ Tax Treaty & Information Sharing Agreements – Canada and Mexico (along with the U.S. and other countries) share financial data under international agreements.
✔ Ties to Canada – If someone still has a Canadian home, driver’s license, health card, or bank accounts, the CRA may consider them a factual resident and require them to file Canadian taxes.
✔ Audits & Penalties – If the CRA later determines that a person never properly declared non-residency, they could face back taxes, interest, and penalties for unreported income.
3. Why Some People Haven’t Faced Issues Yet
While some Canadians may have lived abroad for years without CRA scrutiny, this doesn’t mean they are in full compliance. The CRA has been increasing its enforcement of undeclared foreign income and assets. Eventually, non-compliance can catch up with them.
Final Thoughts
It’s always best to follow the proper tax procedures when leaving Canada to avoid financial and legal complications later. If you or someone you know is unsure about their residency status or tax obligations, it may be helpful to consult a tax professional to ensure full compliance.
Let me know if you have any further questions!
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