Who Is an Emigrant for Tax Purposes?
The Canada Revenue Agency considers you an emigrant when you leave Canada, sever your residential ties (home, spouse/dependents, social ties), and settle permanently or long-term in another country. (canada.ca)
This distinction is critical, because emigrants may face departure tax: a “deemed disposition” of certain property at fair market value when you leave. (canada.ca)
Key Compliance Steps for Digital Nomads
- Determine your date of departure: Use the latest of the date you leave, the date your spouse/dependents leave, or your date of becoming resident in a new country. (canada.ca)
- Form T1161: If you owned property with fair market value over $25,000 when leaving, you must file T1161 listing those properties. (canada.ca)
- Foreign income and tax treaty benefits: Even abroad, Canadian source income may still be taxed or subject to withholding; you may choose section 217 election in certain cases. (canada.ca)
Other Important Considerations
- TFSA / RRSP: You may keep your TFSA when you leave but cannot contribute as a non-resident; RRSPs stay but further contributions and deductions might be restricted. (canada.ca)
- Credits & benefits: After leaving, you're likely ineligible for GST/HST credit, Canada Child Benefit, and other benefits. Notify CRA of departure date promptly. (canada.ca)
Example Scenario
Sarah, a software engineer, moved abroad on June 15, 2026, and sold all her Canadian shares. Because she severed ties and her property was high-value, she needs to report capital gains via deemed disposition, fill T1161, stop claiming certain credits, and report non-resident Canadian source income.
Ben, a digital nomad, stays in Canada for part of the year and keeps permanent home, spouse, and social ties. He may still be considered resident and taxed on worldwide income; so he needs to consult treaty and CRA residency test rules.
Actionable Tips
- Keep detailed records of departure date, asset values, residential ties.
- Consult with cross-border tax specialist to avoid unintended residency or double-tax issues.
- Review whether any proposed tax-law changes (like hybrid mismatch rules or foreign affiliate income) may affect you or your structure.