Canada: Tax Residence In Canada

Last Updated: November 8 2018


A person's status as a tax resident determines the extent to which Canada may tax that person's income.

The test for whether an individual—i.e., a natural person—is a Canadian tax resident turns on the individual's particular circumstances. Every detail counts.

But Canadian courts and the Canada Revenue Agency both agree that the presence of certain significant residential ties—specifically, a home, a spouse, or a dependent in Canada—more readily make an individual a factual resident in Canada.

Yet numerous tax cases suggest that these significant residential ties prove far less significant when determining whether a foreigner has become a Canadian tax resident. The presence of a significant residential tie tends to show that a Canadian resident failed to sever residence rather than show that a foreigner became a Canadian resident.

After discussing the basics of Canadian tax residence, this article examines the role of significant residential ties in tax cases deciding upon the residence status of immigrants, on the one hand, and emigrants, on the other.

This article only discusses tax residence of individuals—that is, natural people. For information on the tax residence of a corporation, see our article "Determining the Residence of a Corporation for Tax Purposes."

The Significance of Tax Residence

Subsection 2(1) and section 3 of Canada's Income Tax Act require a Canadian resident to pay Canadian tax on worldwide income.

In contrast, subsection 2(3) of Canada's Income Tax Act obliges a Canadian non-resident to pay tax only on Canadian-sourced income. In particular, Canada taxes a non-resident's income from:

  • employment in Canada;
  • carrying on a business in Canada; or
  • disposing of a taxable Canadian property

So, your status as a Canadian resident for income-tax purposes determines the extent of Canada's jurisdiction to tax your income.

When Are You a "Resident in Canada"?

Canadian residents come in two forms: factual residents and deemed residents. In addition, you may also be deemed to be a non-resident in Canada if a Canadian tax treaty reckons that you're a tax resident of Canada's treaty partner.

Factual resident

The Canada's Income Tax Act uses the terms "resident" and "ordinarily resident" but defines neither. So, the responsibility of defining residence falls upon Canadian courts—namely, the Tax Court of Canada, the Federal Court of Appeal, and the Supreme Court of Canada.

The Supreme Court of Canada has defined a taxpayer's residence variously as:

  • "the place where in the settled routine of his life he regularly, normally or customarily lives"; and
  • "the degree to which a person in mind and fact settles into or maintains or centralizes his ordinary mode of living."

(Thomson v Minister of National Revenue, [1946] SCR 209, at paras 50 and 71)

Further, courts are quick to observe that your particular circumstances determine whether you're a factual resident in Canada. When rendering its decision about an individual's residence status, a court may examine any of the following factors (and then some):

  • Past and present life habits;
  • Regularity and length of visits in the jurisdiction asserting residence;
  • Ties within that jurisdiction;
  • Ties elsewhere; or
  • The permanence or purposes of a stay abroad.

Not all jurisdictional ties are given equal weight. As we alluded to in our introduction, courts and the Canada Revenue Agency consider some residential ties more significant. These significant residential ties are discussed further below.

Deemed resident

Paragraph 250(1)(a) will deem you to have been a Canadian resident throughout the year if you "sojourned" in Canada for 183 days or more in a year. You sojourn if you visit. So, unlike a factual resident, a sojourner need neither have a "settled routine" in Canada nor "customarily live" in Canada. In other words, even if you're not a factual resident in Canada, your mere physical presence in Canada for just over half a year will brand you a Canadian tax resident.

Deemed non-resident

Canada has numerous bilateral tax conventions or tax agreements with other countries. These conventions or agreements are commonly known as tax treaties. Tax treaties contain provisions aimed at preventing double taxation and combating tax evasion.

Notably, Canada's tax treaties usually contain a tie-breaker clause that settles the issue of a person's country of tax residence where both countries' domestic tax laws claim jurisdiction to tax the person's worldwide income on the basis of domicile, residence, place of management, or any other similar criterion.

To this end, subsection 250(5) of Canada's Income Tax Act deems a person to be a non-resident of Canada if a tax treaty proclaims that the person is a tax resident of Canada's treaty partner. Subsection 250(5) assures consistency between Canada's domestic law and Canada's tax treaties.

What Residential Ties Prove "Significant" for Determining Tax Residence?

The Canada Revenue Agency views three residential ties as "almost always... significant... for the purpose of determining residence status":

  • a dwelling place in the jurisdiction;
  • a spouse or common-law partner in the jurisdiction; and
  • a dependant in the jurisdiction

(Income Tax Folio S5-F1-C1, "Determining an Individual's Residence Status," at para 1.11)

The CRA also views a Canadian entrant's acquisition of either landed immigrant status or provincial health coverage as a significant residential tie to Canada (ibid, at para 1.25).

Are These "Significant" Residential Ties Less Significant for Immigrants of Canada?

Despite the CRA's view, numerous tax cases suggest that these significant residential ties prove far less significant when determining whether a foreigner has become a Canadian tax resident.

On the one hand, the presence of a significant residential tie to Canada tends to show that a Canadian resident failed to sever residence upon leaving Canada. For example, in Thomson v M.N.R. (supra), a Canadian-born taxpayer claimed that he ceased to be a Canadian resident because he left Canada for Bermuda and later moved to the United States. The Supreme Court of Canada held that the taxpayer remained a resident in Canada since he built a home in New Brunswick that he and his immediately family frequented.

But it's a different story for foreigners entering Canada. In both Shih v. R. (2000 DTC 2072 (TCC)) and Mahmood v The Queen (2009 TCC 89), taxpayers, who originally hailed from foreign countries, were held to be non-residents in Canada despite their owning homes in Canada and their immediate family's presence in Canada.

Unlike the taxpayer in Thompson, the taxpayers in Shih and Mahmood were not Canadian-born individuals claiming to have cut ties with Canada; they were foreigners who moved their respective spouses and children into Canada for reasons other than settling into the country themselves.

In Shin, the taxpayer immigrated to Canada with his wife and three sons, purchased a home in Canada, and returned to Taiwan that same year to work. He visited Canada annually to see his family, but his stays did not exceed three months in any given year. The primary reason for the moving of his family to Canada was so that his children could obtain a western education. The taxpayer had several ties to Taiwan: other family members; a job; a house; various memberships, a driver's license, and a bank account. But he had also established the following ties to Canada:

  • the taxpayer had investments in Canada;
  • the taxpayer owned a home in Canada;
  • the taxpayer's wife and children were in Canada;
  • the taxpayer frequently visited his wife and children at their home in Canada;
  • the taxpayer obtained a driver's licence in Canada; and
  • the taxpayer filed his income tax returns as a Canadian resident.

Yet the Tax Court of Canada concluded that the taxpayer was not a resident in Canada. In its reasons, the court indicated that the taxpayer was not in Canada "often enough or long enough to establish any personal connections with the various communities [in Canada] whether they be commercial, educational, cultural, recreational, or social."

And the Shin decision is not unique.

In Song v The Queen (2009 FCA 278), the court held that a Japanese taxpayer failed to be a Canadian resident even though her husband lived in Canada. Although the taxpayer hoped to eventually live in Canada with her husband, her settled, daily routine revolved around her job in Japan.

In Mahmood v The Queen (supra), a Guyanese taxpayer owned a condo in Canada, used Canadian banks to facilitate business transactions, and had a son who lived in Canada. The taxpayer regularly stayed at his Canadian condo and attended a mosque in Canada. Yet the court decided that the taxpayer was not a resident in Canada because his day-to-day activities concerned the business that he ran in Guyana.

In Yoon v The Queen (2005 TCC 366), in 1975, a Korean-born taxpayer moved to Canada, where she later met and married her spouse, had a child, and obtained citizenship. In 2001, she moved back to Korea for work. That year, she spent 135 days in Canada and 224 days in Korea. Her husband remained in Canada. The court applied the Shin decision and concluded that the taxpayer was not a Canadian resident during the 2001 taxation year.

Yoon also illustrates that, despite the CRA's contrary view, the acquisition of landed-immigrant status seemingly isn't a significant residential tie. The Yoon taxpayer entered Canada and obtained not only landed-immigrant status but also Canadian citizenship. Yet the Tax Court of Canada held that the taxpayer was not a resident in Canada. Affirming the Tax Court's decision, the Federal Court of Appeal noted that "residence is not simply a matter of a person's status under the Immigration Act... ."

In summary, Canada's tax-law jurisprudence has apparently accepted a principle whereby the CRA's purportedly significant residential ties prove far less significant when determining whether a foreigner has become a Canadian tax resident.

Tax Tips – Determination of Residency Status

If you misconstrue your tax-residence status, you may erroneously under-report or over-report your Canadian taxable income. Under-reporting your taxable income may lead to monetary penalties, while over-reporting may result in excessive Canadian tax liability.

For additional certainty when preparing your Canadian tax return, you can submit a residence-determination request to the Canada Revenue Agency using Form NR73 (Determination of Residency Status – Leaving Canada) or Form NR74 (Determination of Residency Status – Entering Canada). In response, the CRA will provide you its opinion on your status as a Canadian tax resident.

Still, the CRA's opinion is only as reliable as the details you provide. And, as demonstrated in this article, the CRA's administrative view doesn't always correspond with Canada's tax law. As a result, your residency-determination application must not only frame the relevant facts but also bring attention to the case law favoring your position. Otherwise, the CRA agent appraising your residence-determination application might render an unfavorable decision based on CRA publications yet contrary to law.

Our experienced Canadian tax lawyers can provide you with advice on your status as a tax resident in Canada or prepare your residence-determination application to ensure that it contains the needed factual and legal analysis.

The information is thought to be current to date of posting. Income tax law changes frequently and content may no longer reflect the current state of the law. This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Contact the Author?
Click here to email the Author
In Association with
In Partnership with
Other Canada Advice Centers
Competition and Antitrust
Mergers and Acquisitions
Labour and Employment
More Advice Centers
Useful Resources
Forms available to download for income tax filing in Canada.
Hear David J. Rotfleisch discuss timely and highly topical tax matters during appearances and interviews with specialist publications.
Useful explanatory videos of income tax matters.
The following questions and answers are based on the proposed measures that were announced on December 7, 2015.
The official Government website of the CRA.
This guide is for any person who deals with the Canada Revenue Agency (CRA). The guide gives you information on the 16 rights set out in the Taxpayer Bill of Rights and explains what you can do if you believe that the CRA has not respected your rights.
The Office of the Taxpayers' Ombudsman (OTO) works to enhance the Canada Revenue Agency's (CRA) accountability in its service to, and treatment of, taxpayers and benefit recipients through independent and impartial reviews of service-related complaints and systemic issues.
Ontario personal income tax is an annual tax collected from individuals who are Ontario residents on the last day of the tax year or have income earned in Ontario for the tax year.
The following documents provide instructions for filing your 2015 income tax return.
If you earned income in B.C. or operated a Corporation with a permanent establishment in B.C. last year you need to file an income tax return. Find out when you need to file your income tax return, and if any tax credits or rebates apply to you.
Generally, a corporation must file an Alberta corporate income tax return (AT1) for each taxation year during which it has a permanent establishment in Alberta.
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions