Non-Resident Income Tax Recovery

Non-Resident Income Tax Recovery

Last Update: April 26, 2015

Should You file every year?

Yes, if your income is less than about $40,000 CDN, you should file. That is $40,000 per person...not per couple. If one of you has a higher income, then you can still file just for the lower income partner. You most likely will be eligible to receive a tax refund for all or part of  the income taxes withheld in Canada.

When Can You File a Non-Resident Income Tax Return?

You can file anytime of the year.  There are no late penalties for filing after April 30th...HOWEVER...it must be filed before June 30th. Otherwise, the opportunity for a refund is lost. TioCorp has the Tax Recovery Software Program to do it.

Non-Resident Taxation

Canadians who are living in Mexico and are non-residents of Canada for tax purposes still have to pay 15% on their incomes from CPP, OAS, RRIF and company pension.  This amount is automatically withheld and remitted to CRA on your behalf. At the end of the year, you receive "NR" tax slips showing the income and taxes withheld for the year.

In order to qualify for 15% taxation, instead of the normal 25%, you must file an NR301E form with your financial institutions. Read all about the CRA rules on filing an NR301E on our Canadian Non-Resident Taxation page.

If your income is sufficiently low, you can apply to CRA to reduce the amount of withholding taxes from 15% to some lower number by using an NR5 form, but that approach is not normally recommended. It is cumbersome and you will be required to file a Canadian Tax Return each year if you submit the NR5.  You can read more about the NR5 form on our CRA Forms page.

How to Get Refunds

If your individual total income from OAS, CPP, RRIF and pensions is less than approximately $40,000 CDN for any one person, then you are a candidate for a refund. If you only collect CPP and OAS, you are likely to get a full refund of every penny in taxes that the Canadian government collected over those years.

You need to file a tax return to get your refund.

 

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