Relocation tax guideMoving to Canada: Taxes for Expats 2026
Canada taxes residents on worldwide income at combined federal-plus-provincial rates, with half of capital gains taxable at ordinary rates and no estate or inheritance tax. Residency turns on residential ties rather than a simple day count, and leaving Canada can trigger a departure tax - a deemed sale of most assets. A 183-day rule can also deem you resident.
Canada has no special expatriate regime; what matters most is whether you are resident, which hinges on your ties to Canada rather than a day count. Two features shape a move: there is no inheritance tax, but emigrating triggers a departure tax on unrealised gains. This guide explains residency, the departure tax, and the headline rates.
Canada: key tax rates
| Tax | Rate | Source |
|---|---|---|
| Corporate income tax | 15%Federal corporate rate; provincial/territorial corporate tax additional (combined typically ~23-31%) | PwC Worldwide Tax Summariesas of 2026-06-12 |
| Top personal income tax | 33%Top federal rate; provincial/territorial income tax additional | PwC Worldwide Tax Summariesas of 2026-06-12 |
| VAT / GST (standard) | 5%Federal GST; combined GST/HST ranges 5-15% with the provincial component | PwC Worldwide Tax Summariesas of 2026-06-12 |
| Capital gains | 50% inclusionHalf of a capital gain is taxable, included in income and taxed at ordinary rates (a proposed increase to 66.67% was cancelled in March 2025 and never enacted) | PwC Worldwide Tax Summariesas of 2026-06-12 |
| Inheritance / wealth tax | NoNo estate or inheritance tax (a deemed disposition at death may trigger capital gains) | PwC Worldwide Tax Summariesas of 2026-06-12 |
When you become a tax resident
Canadian residency is determined mainly by residential ties - a home, a spouse or dependants, and personal property in Canada - rather than a day count. Even without strong ties, spending 183 days or more in Canada in a year can deem you a resident. Residents are taxed on worldwide income; non-residents only on Canadian-source income.
Source: PwC Worldwide Tax Summaries - Canada (Residence) (as of 2026-06-24).
Residency is about ties, not just days
Canada looks first at your residential ties - where your home, family, and belongings are - to decide residency. The 183-day rule is a backstop that can deem you resident even with few ties. This matters because residents are taxed on worldwide income at combined federal and provincial rates, so the province you settle in affects your total bill.
Capital gains are taxed on a 50% inclusion basis: half of a gain is added to income and taxed at ordinary rates. A proposed increase of the inclusion rate to two-thirds was cancelled in March 2025 and never took effect, so the long-standing 50% rule continues.
The departure tax
When you cease to be a Canadian resident, Canada treats you as having sold most of your property at fair market value on the day you leave, taxing the accrued gains - the 'departure tax'. Some assets (such as Canadian real property) are excepted, and security can sometimes be posted to defer payment. There is no estate or inheritance tax, but a similar deemed disposition applies on death.
Before you move: what to weigh
- Residency is driven by ties (home, family) - cutting them cleanly matters as much on the way out as on the way in.
- Leaving Canada can trigger a departure tax on unrealised gains; plan the timing and which assets are affected.
- Combined federal-plus-provincial rates vary by province, so where you live within Canada changes your tax.
- US citizens remain taxable by the US on worldwide income; the Canada-US treaty and foreign-tax credits then apply.
Get this right for your situation
Cross-border tax turns on your specific facts. Find a tax professional who works with people moving to Canada.
Does Canada have an inheritance tax?
No - Canada has no estate or inheritance tax. Instead, a person is treated as having disposed of their capital property at fair market value on death, so accrued capital gains are taxed on the final return (half of the gain is included in income). The result can resemble an estate tax in effect.
What is Canada's departure tax?
When you stop being a Canadian tax resident, Canada deems you to have sold most of your property at market value on departure and taxes the accrued gains. Some assets are excepted and payment can sometimes be deferred with security. It is a key cost to plan for before emigrating.
When are you a Canadian tax resident?
Mainly when your residential ties - home, spouse or dependants, belongings - are in Canada; the 183-day rule can also deem you resident. Residents are taxed on worldwide income at combined federal and provincial rates; non-residents only on Canadian-source income. Confirm your ties, as the test is facts-based.
Informational only, not tax advice. Cross-border tax depends on your personal circumstances and changes often; figures are dated to their sources. Confirm your position with a qualified professional before moving or filing.
Important disclaimer
Informational only — not tax advice. This page summarises publicly available information about tax in Canada as of July 2026. Tax laws change, individual circumstances vary, and the application of any rule depends on your specific facts.
TaxProsRated does not provide tax, legal, accounting, or financial advice. Before acting on anything you read here, consult a qualified tax professional licensed in your jurisdiction (in the US: CPA, Enrolled Agent, or attorney; in the UK: CIOT- or ATT-qualified adviser; in Australia: TPB-registered tax agent; elsewhere: a locally-licensed equivalent). TaxProsRated, its operators, and its contributors disclaim all liability for action taken in reliance on this page.