Tag Archives: Canada Departure Tax

Canadian Expats Abroad – The four tax issues you should know about, but didn't know to ask


The Canadian Expat believes that Canadians abroad represent an incredibly rich and valuable resource for Canada. Canadians living and working abroad are directly and indirectly responsible for billions of dollars in bilateral trade. They are exceptionally well educated, linguistically adept and culturally bilingual. They are cultural and economic ambassadors for Canada. The more we as a country engage them, the more Canada will prosper.
There are an estimated 2.8 million Canadians living and working outside of the country. To put that in perspective it would constitute the 4th largest province in Canada.

In the 21st Century the most interesting thing about a person is their “tax residency”

It’s not only Americans abroad who have difficult tax issues. Moving to another country subjects all people to new and difficult tax problems. Canadians are NOT exempt from problems when they move from Canada. It’s important that tax residency in Canada be clearly understood. These problems include (but are certainly not limited to):
Becoming a non-resident: Severing Tax Residency With Canada

The cost of becoming a non-resident: Canada Departure Tax

Living as a non-resident of Canada: Taxation on Canadian source income while a non-resident of Canada

Taxation and reporting of Canadian assets while living as a tax resident of another country

John Richardson – Follow me on Twitter: @Expatriationlaw

Part 8 – “The U.S. “Exit Tax vs. Canada’s Departure Tax – citizenship taxation vs. residence taxation”

The above tweet references the following comment:

At least the departure tax has a sliver of logic to it, and an appropriate name. To have to pay a US “exit tax” when I left empty handed over thirty years ago, beggars belief. Perhaps if they called it an escape tax or freedom tax that would make more sense.

Composing this series of posts about the U.S. S. 877A “Exit Tax” made me realize that “Exit Taxes” are a prism through which to view a country’s tax system. Any kind of tax imposed on leaving the “tax jurisdiction” of a country will reveal much about the fairness of a tax system. Yet there has been little discussion of “Exit Taxes”. In theory an “Exit Tax” is imposed when one emigrates from one country and immigrates to another country. This is how “Canada’s Departure Tax” works. It is NOT how the U.S. “Exit Tax” works.
I recently came across an interesting book written by Nancy Green and Francois Weil titled:
Citizenship and Those Who Leave: The Politics of Emigration and Expatriation
The description includes:

Exit, like entry, has helped define citizenship over the past two centuries, yet little attention has been given to the politics of emigration. How have countries impeded or facilitated people leaving? How have they perceived and regulated those who leave? What relations do they seek to maintain with their citizens abroad and why? Citizenship and Those Who Leave reverses the immigration perspective to examine how nations define themselves not just through entry but through exit as well.

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