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)
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)
- Backup multi-factor authentication (MFA): Remote workers must maintain security options (authenticator apps, passcode grids) in CRA digital accounts. (canada.ca)
- 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)
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)
- 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)
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.