Your tax residence is the jurisdiction (country) whose tax laws you primarily abide by and (usually) where you pay the most tax. Since the tax laws vary so much from one country to the next, the question of which country you reside in for tax purposes can be vital to your financial picture.

But determining tax residency is usually not closely related to ‘residency’ for immigration purposes. Moreover it’s much less clear-cut. Tax residency is based on a range of possible factors (e.g., location of domicile, spouse, dependents and self; location of assets, work and/or business activity, even ties such as drivers’ licenses, library cards and gym memberships).

There are essentially three possibilities for any given tax year: a person can be a tax resident, meaning their tax home is in Canada; a nonresident, meaning their tax home is in another country; or a part-year resident, meaning they were nonresident for part of the year, and resident for the other part.

While for most people the determination is simple when all the above factors point to the same country, it can be unclear if those factors point in different directions.

In complex situations, Canada Revenue Agency (CRA) determines residency on a case-by-case basis. Read more about their criteria on CRA’s page on Determining Residency Status.

If comparing this information to your specific situation doesn’t yield a clear answer, you may opt to request a ruling from CRA by downloading Form NR73 (leaving Canada), completing it, and sending it to CRA. You can download the form from the webpage given above.

Once CRA reviews the form and responds in writing, whatever determination they reach is more or less the final word.