Factual residents – Temporarily outside of Canada

This page offers information for Canadians who are temporarily outside of Canada.

Topics

Residency status

You are a factual resident of Canada for income tax purposes if you keep significant residential ties in Canada while living or travelling outside the country.

The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes.

Notes

If you have established ties in a country that Canada has a tax treaty with and you are considered to be a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada, you may be considered a deemed non-resident of Canada for income tax purposes.

You become a deemed non-resident of Canada when your ties with the other country become such that, under the tax treaty that Canada has with the other country, you would be considered a resident of that other country. As a deemed non-resident, the same rules apply to you as a non-resident of Canada.

Situations where you could be considered a factual resident

You may be considered a factual resident of Canada if you are:

Note

If you are a missionary in another country and you meet certain requirements, you can choose to be considered a factual resident even if you do not keep residential ties in Canada. To make this choice, you must satisfy all of the following requirements:

  • be a Canadian citizen or a permanent resident of Canada
  • be in the service of a religious organization that has its national ministry office in Canada
  • be sent out of Canada for 5 years or less
  • file an income tax and benefit return and report all income you receive from sources inside and outside Canada for each year you are absent from Canada

In this case, contact the CRA for more information.

Your tax obligations

As a factual resident, your income is taxed as if you never left Canada. As such, you will continue to:

Example

You are an industrial designer. Your employer has sent you to work in Hong Kong for 18 months. Your spouse and children stay at the family home in Saskatchewan during your absence. The CRA considers you to be a factual resident of Canada for income tax purposes because of your residential ties in Canada.

When you file your Canadian return, you will report your income from sources inside and outside Canada, and you can claim deductions that apply to you. You will pay federal tax and Saskatchewan provincial tax. You can reduce both federal and provincial taxes by claiming federal and provincial non-refundable tax credits that apply to you.

Which tax package should you use

For each tax year that you're a factual resident of Canada for income tax purposes, use the Income Tax Package for the province or territory where you keep residential ties. Generally, this is the province or territory where you lived before you left Canada.

Filing due date

Generally, your income tax return must be filed on or before:

Note

A balance of tax owing must be paid on or before April 30 of the year after the tax year, regardless of the due date of the tax return.

What happens to your residency status if your situation changes

If your circumstances change, you may no longer be considered a factual resident of Canada for income tax purposes. This could happen, for example, if you:

Generally, you are considered to be an emigrant in the year that you sever your residential ties with Canada. For all following years, you will be considered a non-resident of Canada.

If you think your residency status for income tax purposes may have changed, see Determining your residency status for more information.

Entitlements to benefits and credits

Canada child benefit

If you are eligible to receive the Canada child benefit (CCB), you will continue to receive it and any related provincial or territorial benefits you are eligible for during your absence from Canada. However, you will have to file a return each year so the CRA can calculate your CCB. If you have a spouse or common-law partner, they will also have to file a return each year. If your spouse or common-law partner is a non-resident of Canada, they will have to file Form CTB9, Income of Non-Resident Spouse or Common-Law Partner for the Canada child benefit.

If you have a child while outside Canada, you can apply for the CCB by sending the CRA a completed Form RC66, Canada Child Benefits Application (includes federal, provincial, and territorial programs). For more information, see Booklet T4114, Canada Child Benefit and related provincial and territorial programs.

Foreign tax credit

You may be able to claim a foreign tax credit (FTC) on your Canadian income tax return if you paid tax on income or profits to a foreign country on income from that country that you report on your Canadian income tax return.

The FTC may reduce the federal and provincial/territorial tax you have to pay on the foreign income.

In most cases, the FTC you can claim for each foreign country is the lower of the following two amounts:

Note

You generally cannot claim a foreign tax credit for taxes you paid to a foreign country on income you earned in Canada.

To claim this credit, complete Form T2209, Federal Foreign Tax Credits, and attach it to your return.

For more information on how to calculate the foreign tax credit, see Line 40500 – Federal foreign tax credit or Income Tax Folio S5-F2-C1, Foreign Tax Credit.

Forms and publications

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: