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Canada taxes residents on worldwide income. Severing Canadian tax residency requires cutting 'residential ties' — but there's a departure tax on unrealised gains.
Canada imposes a departure tax — deemed disposition of all assets at fair market value on the date you become non-resident. Capital gains tax applies on the deemed gain. RRSPs can be retained but subject to withholding on withdrawal. Principal residence exemption still applies.
Canadians may qualify for citizenship in these countries through ancestry — often free or near-free:
D7 visa, NHR 2.0, large Canadian expat community, affordable
Friendly Nations Visa (Canada qualifies), territorial tax, warm
0% income tax, growing Canadian community
Proximity, NAFTA familiarity, low cost of living, temp resident visa
Pensionado/Rentista, close to North America, affordable healthcare
English-speaking EU, Global Residence Programme
Canada's departure tax makes leaving expensive if you have significant unrealised capital gains. Planning the timing of departure around asset sales is critical. The good news: once non-resident, Canada only taxes Canadian-source income.
Canadians moving abroad are typically driven by climate (escaping winters), cost of living, or proximity to family while reducing tax burden. Mexico and Costa Rica are the proximity picks; Portugal and Spain for Europe.
Canadian passport is strong (#7 globally). Second passport seekers typically want EU access or a zero-tax jurisdiction. Caribbean CBI and EU ancestry routes are most popular.
Canadian non-residents can work remotely tax-free from many countries using digital nomad visas. Portugal D8, Spain, and Costa Rica are popular. Key risk: maintaining too many ties to Canada and failing to sever residency.
OAS and CPP are payable worldwide but subject to 25% withholding (reduced by treaty). Popular retirement destinations: Mexico, Costa Rica, Portugal, Panama — all with low cost of living and retirement-specific visas.
Rarely done since ceasing tax residency is sufficient to stop Canadian worldwide taxation. Mainly relevant for dual citizens or those seeking citizenship in countries prohibiting dual nationality.
Renunciation note: Renunciation of Canadian citizenship requires being a citizen of another country. No exit tax beyond the departure tax already triggered on ceasing residency.