Residency status and tax obligations

In Canada, your income tax obligations are based on your residency status, not your citizenship or immigration status. You are responsible for determining your residency status and understanding your tax obligations. You need to know your residency status before you can know your tax responsibilities and filing requirements for Canada. Learn more about your tax obligations.

If you need help to determine your residency status for tax purposes, fill out Form NR74, Determination of Residency Status (entering Canada), or Form NR73, Determination of Residency Status (leaving Canada), and send it to the address or fax number indicated on the form. The Canada Revenue Agency (CRA) will then give you their opinion about your residency status.

Residency status and film and media tax credits

The CRA administers film and media tax credits for the federal government and the provinces of British Columbia, Ontario and Manitoba. These tax credits are generally based on qualifying labour expenditures paid by corporations to their employees and other qualifying individuals who are residents of Canada.

Residents of Canada, for the purposes of film and media tax credits, include factual residents and deemed residents.

Non-residents and deemed non-residents generally do not qualify for film and media tax credits.

Factual residents

Factual residents are individuals who have established significant residential ties to Canada. Their worldwide income is subject to Canadian federal and provincial or territorial income tax during the part of the year that they were a factual resident. Learn more about factual residents.

Salaries and remuneration paid to factual residents may qualify for the federal and provincial film and media tax credits.

Deemed residents

Deemed residents are individuals who have not established significant residential ties to Canada but were in Canada for 183 days or more in a calendar year. Their worldwide income is subject to Canadian federal income tax throughout the year and is subject to a federal surtax instead of provincial or territorial tax. Learn more about deemed residents.

Salaries and remuneration paid to deemed residents of Canada may qualify for the federal film and media tax credits only. They do not qualify for the provincial film and media tax credits.

Non-residents

Non-residents are individuals who have not established significant residential ties to Canada and were in Canada for less than 183 days in a calendar year. Their income from Canadian sources is subject to Canadian federal tax, unless exempted by a treaty provision. Their income is also subject to provincial or territorial tax if it is earned from a business with a permanent establishment in Canada. Learn more about non-residents.

Salaries and remuneration paid to non-residents do not qualify for any federal or provincial film and media tax credits.

Deemed non-residents

Deemed non-residents are individuals who would otherwise be considered as factual or deemed residents but are considered to be a resident of another country under an income tax treaty between Canada and that country. Their income from Canadian sources is subject to Canadian federal tax, unless exempted by a treaty provision. Their income is also subject to provincial or territorial tax if it is earned from a business with a permanent establishment in Canada. Learn more about non-residents. (Note that tax obligations for deemed non-residents are the same as for non-residents.)

Salaries and remuneration paid to deemed non-residents do not qualify for any federal or provincial film and media tax credits.

International workers, dual residents and international tax treaties

Canada has income tax treaties with other countries to avoid double taxation. If you are a resident of two countries, including Canada and a country that Canada has an income tax treaty with, the CRA will look at the terms of that treaty to determine which country you are considered to be a resident of for tax purposes.

Individuals can be residents for tax purposes in more than one country at the same time. In such cases, where there is a tax treaty between Canada and the other country, individuals will be considered residents where they have the strongest social and economic ties.

For example, Canada has a tax treaty with the United States (U.S.). Individuals who are considered residents of both Canada and the U.S. will be considered residents for tax purposes in the country in which they have established the strongest ties. If they have stronger ties to the U.S., they will be deemed non-residents in Canada for tax purposes and their salary and remuneration will not qualify for federal or provincial/territorial film and media tax credits.

A work permit indicates a temporary stay in Canada, but is not conclusive for determining residency for tax purposes. The residency status of each individual is reviewed independently, on an annual basis, and is based on the facts and information made available to the CRA at the time of an audit.

Residency guidelines for film and media tax credits – List of documents

The CRA considers the documents listed below to be evidence of significant residential ties to Canada. However, the CRA may ask for more information as outlined in Income Tax Folio S5-F1-C1, Determining an Individual's residence Status, to support the residency status of an individual in Canada. All documents sent to the CRA are subject to verification, especially in situations where there is dual residency and an income tax treaty applies.

The CRA requires a copy of any one of the following documents to support residency status:

• Notice of assessment (T1) showing that the individual is a resident of Canada/province for the relevant tax year
• Letter from the CRA giving an opinion of the individual's residency status in Canada for the relevant year(s) after submitting Form NR74, Determination of Residency Status (entering Canada), or Form NR73, Determination of Residency Status (leaving Canada)
• Long-term (one year or more) lease or purchase of a Canadian dwelling with utility and/or cell phone bills showing the individual is living at that Canadian address

If none of the above documents are available, the CRA requires a copy of three of the following documents to support residency status:

• Copy of the last income tax return filed in the country of origin and/or any document filed with the foreign tax authority in which the individual has declared that they are no longer a resident
• Short-term (less than a year) lease agreement or letter from a landlord supporting a rental agreement
• Provincial/territorial health or services card for the individual, their spouse and/or dependant
• Driver's licence or vehicle registration from the relevant province/territory (a provincial or territorial services card that includes health care and a driver’s licence will count as two documents)
• Professional association or union membership in Canada
• Statements of accounts (for example, bank accounts, retirement savings plan, credit cards, securities accounts) from a Canadian branch of a financial institution

Learn more about significant residential ties.

Forms and publications

• Information Sheet RC642, Film and Media Tax Credits: Residency guidelines
• Information Sheet RC643, Working in Canada Temporarily: Residency status and tax obligations
• Form NR74 ,Determination of Residency Status (entering Canada)
• Form NR73, Determination of Residency Status (leaving Canada)
• Income Tax Folio S5-F1-C1, Determining an Individual’s Residence Status