Taxes and leaving Canada

Ceasing Canadian tax residence, deemed disposition, the tax treaty and what Germany taxes.

Canada: ceasing residence

• Canadian tax liability follows residence, not citizenship. Whether you stay a resident depends on your residential ties (home, spouse, dependants, and other ties). The date of emigration is the latest of three dates set out by the CRA. Source: CRA: Leaving Canada (emigrants).
• If unsure, the CRA offers a residency determination (form NR73). RC381 is the CRA form for the interprovincial calculation of CPP/QPP contributions.
• Departure tax (deemed disposition): on emigrating you are treated as having sold most property at fair market value. If that value exceeds $25,000, file Form T1161; T1243 calculates the gain (CRA: dispositions of property).
• Not deemed sold (CRA): Canadian real property, RRSP/RRIF/TFSA/RESP and pension plans. Deferral: you may elect to postpone the tax by giving security (Form T1244) by 30 April of the following year; security is required from CAD 16,500 (former Québec residents CAD 13,777.50). Details: CRA. General information only.
• Ask the CRA or an adviser about the return itself; tax treatment of your own assets depends on the case.

Germany: taxed from arrival

With a residence or habitual abode in Germany you are taxable on worldwide income (§ 8 AO). You receive a tax ID after registering your address. Freelancers: Freelance.

Double taxation treaty

Germany and Canada have a treaty (signed 19 April 2001; approval act BGBl. 2002 II p. 670; entry into force 28 March 2002, announced BGBl. 2002 II p. 962). How it treats pensions, RRSP/TFSA or capital gains must be checked per case. German treatment of a TFSA (tax-free in Canada) is not verified.

Before you go

• Health cover: Social security and health (provincial plan).
• Pension: Canada-Germany agreement.