Leaving Canada - what do I have to do? (tax?)

[Canadiandreaming]

Hello,

I am planning to leave Canada soon, after 10 months here. Returning to Europe. I already filed my tax return for 2020.

All I own is a cheap car and mostly the belongings I brought with me. I also have a chequing account with some cash in it. I am working for a UK organisation remotely and know that I will have to file a 2021 Canadian tax return to cover the time I have been resident this year, and pay the required taxes.

What I would like to know is whether I have to do anything else before departing in terms of tax? Will I get to the airport and find I cannot board my flight because I owe departure tax, or need to complete paperwork?

Many thanks

 

[Canadiandreaming]

Anybody?

 

[Canadiandreaming]

Does anybody know what is required prior to emigration in my circumstances?

 

[jclarke99]

Does anybody know what is required prior to emigration in my circumstances?

You may want to check out the book "Cross Border Taxes" by Cori Carl. It's focus is on U.S.-Canada, but seems like the exit information (pp.57-62) would apply to you. In short, you wouldn't have to pay an exit tax because you've been in Canada for fewer than 60 months.
Update your address with CRA as soon as you move.
The year you leave Canada forever, you'll need to file your Canadian taxes a little differently. The book has further details.

 

[jclarke99]

Another resource is "The Border Guide" by Robert Keats. Again, it focuses mainly on Canada-U.S., but again, there's info that should be helpful for you. According to this source, you will want to close out your checking account, and let the bank know (preferably in writing) that you are leaving Canada and should be considered a non-resident as of your exit date. Also...

• Cancel your Canadian medical coverage.
• If you aren't already, you may need to be a legal European resident before exiting Canada. You should have any proper European immigration documentation in place before you depart from Canada.
• Cancel any memberships you created in Canada (club, religious, etc.)
• Cancel all Canadian credit cards, your driver's license, and your vehicle registration.
• Accept no mail deliveries to any address in Canada. You should have all deliveries forwarded to a European address.

 

[Canadiandreaming]

Thanks mate, very helpful and much appreciated!

 

[canuck78]

Hello,

I am planning to leave Canada soon, after 10 months here. Returning to Europe. I already filed my tax return for 2020.

All I own is a cheap car and mostly the belongings I brought with me. I also have a chequing account with some cash in it. I am working for a UK organisation remotely and know that I will have to file a 2021 Canadian tax return to cover the time I have been resident this year, and pay the required taxes.

What I would like to know is whether I have to do anything else before departing in terms of tax? Will I get to the airport and find I cannot board my flight because I owe departure tax, or need to complete paperwork?

Many thanks

You will nee to contact CRA and advise them that you are leaving Canada for the foreseeable future. Every province will have instructions about how to advise them that you are leaving the province longterm.

 

[Canadiandreaming]

You will nee to contact CRA and advise them that you are leaving Canada for the foreseeable future. Every province will have instructions about how to advise them that you are leaving the province longterm.

Hi thanks.

So everybody who wants to leave Canada has to phone CRA and tell them? I don't understand the part about the province.

 

[Totoro1661]

Hi there,

The emigration tax process is convoluted and, in most cases, you should best consult with a CPA firm that is familiar with the rules.

Some of the things you will need to consider and ask your accountant besides your departure tax:
- How will you be taxed in the year of immigration
- There is an election to defer the departure tax, should it be too high for you to pay in one go - can they advise you in doing so
- What are the additional tax forms you need to file besides your T1
- What are the government bodies you need to inform before you leave Canada
- Based on your circumstances and moving plan, is everything you're doing sufficient to cut ties with Canada? If you don't do anything in addition, will you be considered a "deem resident" and therefore owe taxes on your worldwide income after departure

Happy to recommend you a few CPA firms I know in Vancouver, so feel free to PM me and good luck with everything!

 

[canuck78]

Hi thanks.

So everybody who wants to leave Canada has to phone CRA and tell them? I don't understand the part about the province.

Sorry missed the health card part of contacting the province. Yes you should be contacting CRA to determine your residency status unless you have zero connections to Canada (no accounts, no property, no family, etc.) You need to inform CRA of your residency status.

 

[YASASWI GOMES]

Departure tax
When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax).

Your property could include the following: shares, jewelry, paintings, or a collection.

For more information, go to Dispositions of property.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

Some ppl preplan and sell off everything and on top of that will transfer their cash to native country after clearing taxes. Forgot what about credit card balances? What if someone purchases stuff on emi and exits Canada without clearing it?

 

[jd13]

You may want to check out the book "Cross Border Taxes" by Cori Carl. It's focus is on U.S.-Canada, but seems like the exit information (pp.57-62) would apply to you. In short, you wouldn't have to pay an exit tax because you've been in Canada for fewer than 60 months.
Update your address with CRA as soon as you move.
The year you leave Canada forever, you'll need to file your Canadian taxes a little differently. The book has further details.

Hi jclarke99.
Regarding In short, you wouldn't have to pay an exit tax because you've been in Canada for fewer than 60 months .
I don't think this is true right? You still have to pay departure tax on your investments which u acquired in Canada, no

 

[YASASWI GOMES]

If it was me, I will buy a flight ticket, drink a lot (I am sober) and enjoy my return back home without even filling any exit application hahaha before that I will withdraw all cash.
Nothing will happen. Many of my patois people purchased mobile phones on instalments and ran away to their countries because they hate everyone. The debauchee locals are that cheap in employment and visa offices and cause for their hatred.

 

[jclarke99]

Hi jclarke99.
Regarding In short, you wouldn't have to pay an exit tax because you've been in Canada for fewer than 60 months .
I don't think this is true right? You still have to pay departure tax on your investments which u acquired in Canada, no

Not sure, you'd want to check with a cross-border accountant. My understanding is that the exit tax doesn't apply to tax-sheltered investments (401k, 403b, IRA, pension, RRSP, RESP, TFSA, etc.). It applies to taxable investments - such as unrealized capital gains up to the time of departure, at which point you'd have a new cost basis going forward. Of course, if you maintain Canadian assets, you'd need to continue filing Canadian taxes after departing.