Digital Nomad
Digital Nomads & Non-Residents: What New Changes Mean Ahead of Tax Filing Season
Canada is enhancing digital services while implementing tax treaties and non-resident filing rules that directly affect remote workers and nomads. Know what forms, credits, and rates apply to you.
By NomadicTax Research Team • 6-7 min read • February 21, 2026
## Who Counts as a Non-Resident or Deemed Resident
Canada uses **sections 216 and 217** of the Income Tax Act to determine the status and tax obligations of non-residents earning Canadian-source income. Filers include those renting property in Canada, working part time remotely for Canadian clients, or with other Canadian income. The CRA’s guideSG non-residents (guide 5013-G) lay out updates for 2025 filing. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/non-residents/5013-g/guide-non-residents-deemed-residents-canada-completing-your-return.html?utm_source=openai))
## New Filing Updates & Digital Advancements
- **NETFILE Access Codes & Notices of Assessment** will be fully digital starting February 2026. Non-residents using software must ensure they can receive these digitally via “My Account”. ([canada.ca](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2026/what-you-need-for-2026-tax-filing-season.html?utm_source=openai))
- **Backup multi-factor authentication (MFA)**: Remote workers must maintain security options (authenticator apps, passcode grids) in CRA digital accounts. ([canada.ca](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2026/what-you-need-for-2026-tax-filing-season.html?utm_source=openai))
- **Digital Autopopulated Forms and Auto-Fill My Return**: Simplifies returns for those with simpler Canadian income sources. Self-employed nomads still may need to gather foreign income statements separately. ([canada.ca](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2026/what-you-need-for-2026-tax-filing-season.html?utm_source=openai))
## Tax Treaties & Credits—What To Claim
- **Section 217 Election**: For rental or investment income, non-residents may elect to be taxed on net income with deductions rather than gross withholding. Guide 5013-G explains this and breaks down required documentation. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/non-residents/5013-g/guide-non-residents-deemed-residents-canada-completing-your-return.html?utm_source=openai))
- **Foreign Tax Credits**: If you paid tax in another country, you may avoid double taxation if there’s a Canadian treaty. Keep proof.
- **Personal Income Tax Rates**: Be aware that the lowest tax bracket was reduced to **14% effective July 1, 2025**, which affects non-residents on deductions or refundable credits that reference this rate. ([canada.ca](https://www.canada.ca/en/department-finance/corporate/transparency/2025/briefing-binder-created-occasion-appearance-standing-committee-on-finance-october-6-2025.html?utm_source=openai))
## Example: Remote Freelancer in Spain
Maria provides consulting services to Canadian clients but lives in Spain. She earns CAD 30,000 Canadian-source income in 2025. Under section 217, Maria can file to have her net income taxed instead of having a flat 25% withholding. She must file by the deadline and maintain receipts for expenses. Also, ensure her “My Account” is active and authenticated for digital access.
## Action Items for Digital Nomads
- Register and activate “My Account” with proper security; ensure backup MFA is set up.
- Check eligibility for **section 217** election well before April/June deadlines.
- Retain detailed records of all Canadian vs. foreign income.
- Use updated CRA guides (5013-G) to identify deductible expenses for non-resident income.
## Looking Forward
Many of these changes are about smoother digital processes; however, tax status, treaty obligations, and correct classification of income remain foundational. Being proactive keeps your tax obligations under control—instead of costly surprises during filing season.