Expert Blog

Tax tips for snow bunnies

Posted June 19th 2014


Many Canadians like to pack their bags and spend some time abroad. While a short vacation won’t have any effect on your tax situation, spending substantial time outside of the country might. Here are a few tax implications to keep in mind when you head out on your excursion.

Canadians who spend longer periods of time abroad but keep significant ties at home are considered factual residents of Canada. The term factual resident means that you are still considered a resident of this country for income tax purposes, despite the fact that you’ve left. Factual resident status may apply in the following circumstances:

  • You are working temporarily outside of Canada
  • You are teaching or attending school in another country
  • You frequently commute to and from the United States for work
  • You spend part of the year out of the country for vacation or health reasons

If you are a factual resident, you are required to report all of your world income and may claim all credits and deductions that apply to you. You must also pay all federal and provincial/territorial taxes that apply to you. This means you must declare and pay tax on every dollar you earn, even if it’s earned in another country.

It is also possible to be considered a deemed resident of Canada. This would apply if you would otherwise be considered a non-resident, but are a member of the Canadian forces, working for the Canadian government overseas or are working under a Canadian International Development Agency assistant program. As a deemed resident of Canada for the tax year, you are required to report world income. You may claim all federal credits and deductions that apply to you, including the quarterly GST/HST credit, however you are not eligible for provincial/territorial credits. You are also subject to a federal tax but, rather than paying provincial or territorial taxes, you would only be required to pay a federal surtax.

The tax filing deadline for factual residents and deemed residents is still April 30, or June 15 if you, your spouse or common-law partner was self-employed for the previous tax year. It’s important to remember that, even if you were abroad for the year and didn’t earn a single dollar, you still need to file a return. But this isn’t just for the CRA’s benefit. Filing a return activates tax credits that you may be eligible for, including the Universal Child Care Benefit, the Canada Child Tax Benefit and the GST/HST credit.


At H&R Block, we believe our clients are entitled to the highest level of service. Our tax advisors are some of the best in the business, and are here to help you with any tax situation you might have. It’s our guarantee.


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