Introduction
Form NR73, known as the “Determination of Residency Status (Leaving Canada),” is a voluntary document that individuals can file with the Canada Revenue Agency to seek an opinion on their tax residency status when planning to leave Canada. When planning to leave Canada, a common question can arise: Should you file Form NR73? The answer depends on your specific circumstances, and contrary to what many people assume, filing this form is entirely optional.
Form NR73, officially titled “Determination of Residency Status (Leaving Canada),” is a Canada Revenue Agency form that individuals can submit to receive the CRA’s opinion on their tax residency status. The CRA processes approximately 13,500 of these requests annually, even though about 500,000 individuals change their residency status each year. This means the vast majority of people leaving Canada handle their residency determination without requesting the CRA’s formal opinion.
For wealthy Canadians planning permanent emigration, understanding when Form NR73 adds value versus when it creates unnecessary complications is part of comprehensive exit planning. This guide explains exactly when filing makes sense and when you’re better off without it.
What is Form NR73?
Form NR73 is an optional form that individuals who have left or are planning to leave Canada can submit to the CRA to request help determining their residency status for income tax purposes. According to the CRA, individuals complete this form “if you have left or are planning to leave Canada temporarily or permanently and need help determining your residency status.”
The Critical Fact: Filing is Not Required
As confirmed by a CRA evaluation report, “there is no legal requirement for the taxpayer to request a determination from the CRA.” You can determine your residency status yourself or with help from a tax professional without ever filing Form NR73.
The Opinion is Non-Binding
Even if you file Form NR73, the CRA’s response is explicitly “non-binding.” According to CRA guidance, the opinion “is not binding on the CRA and may be subject to a more detailed review at a later date.” This means the CRA can later disagree with its own previous determination.
Based Entirely on the Information You Provide
The CRA states that the opinion “is based entirely on the facts provided by the taxpayer to the CRA in Form NR73.” If your circumstances change, or if you inadvertently omitted relevant information, the determination may not reflect your actual status.
When to File Form NR73
While Form NR73 is optional, there are specific situations where requesting the CRA’s opinion provides value. These situations often involve some uncertainty; thus, having official guidance can really help.
Ambiguous Residency Situations
For example, consider an executive from Toronto relocating to Singapore for a three-year work assignment. The individual keeps a home in Canada, leased to a family member, maintains Canadian bank accounts and RRSP investments, and plans to return after the assignment. With significant residential ties remaining in Canada, this person faces genuine uncertainty about whether they’ll be considered a factual resident or non-resident for tax purposes.
According to Income Tax Folio S5-F1-C1, “unless an individual severs all significant residential ties with Canada upon leaving Canada, the individual will continue to be a factual resident of Canada.” In borderline cases, Form NR73 can provide clarity on how the CRA views your specific combination of remaining and severed ties.
Read Also: Leaving Canada? In-Depth Guide to Canadian Tax Residency Rules by Immigration Lawyers
Treaty Tie-Breaker Situations
When an individual maintains residency ties in both Canada and another country with which Canada has a tax treaty, treaty tie-breaker rules determine residency for tax purposes. The CRA’s determination can help clarify how these rules apply to your situation.
For instance, a business owner who splits their time between a home in Vancouver and a condo in Florida, holds a U.S. Green Card, and manages business operations in both countries may be considered a dual resident. This situation activates the tie-breaker rules of the Canada-U.S. tax treaty. Form NR73 can provide the CRA’s preliminary view on which country’s residency would apply under the treaty’s permanent home test and center of vital interests analysis.
Planning Future Provincial Healthcare and Benefits
If you’re leaving Canada temporarily and need confirmation of eligibility for continued provincial benefits or healthcare coverage, Form NR73’s determination can support your application for these programs. Some provinces require documentation of residency status from the CRA.
Third-Party Requirements
Financial institutions, pension administrators, or foreign tax authorities may request official documentation of your Canadian residency status. According to CRA guidance, a “Letter from the CRA giving an opinion of the individual’s residency status” after submitting Form NR73 can serve as evidence of residency determination.
Read Also: How to Sever Ties with Canada Legally: A Step-by-Step Guide
When NOT to File Form NR73
In many cases, filing Form NR73 causes unnecessary complications without offering real benefits. Knowing when to avoid this form is just as important as knowing when to use it.
Clear-Cut Non-Resident Situations
If you’ve severed all significant residential ties with Canada, the determination is straightforward. Consider an investor from Calgary who sells their Canadian home, cancels all Canadian club memberships, closes Canadian bank accounts except one for final tax purposes, moves their spouse and children to Portugal, and establishes a permanent residence there. This person has clearly become a non-resident.
According to Income Tax Folio S5-F1-C1, the CRA considers significant residential ties to be your dwelling place, spouse or common-law partner, and dependants. When you’ve severed all of these ties, filing Form NR73 adds no value. The law is clear, and the outcome is inevitable.
When You Need a Binding Determination
Form NR73 provides a non-binding opinion that the CRA can later contradict. If you need certainty for significant tax planning purposes, the Income Tax Rulings Directorate can issue an advance income tax ruling.
According to Income Tax Folio S5-F1-C1, “Where certainty is required in respect of the tax consequences of the proposed departure from or arrival in Canada of a particular individual taxpayer, the Income Tax Rulings Directorate may, in appropriate circumstances, be prepared to issue a binding advance income tax ruling with respect to the residency status of that taxpayer.”
Consider a business owner who sells a company for $50 million and plans to emigrate before the sale closes. The departure tax implications could run into the millions of dollars, and any uncertainty about residency status on the departure date creates unacceptable risk. This situation calls for a binding advance ruling, not Form NR73’s non-binding opinion.
Strategic Timing Concerns
Filing Form NR73 creates a documented position that the CRA reviews. In complex situations where your tax advisor is still developing the optimal residency position, filing prematurely could leave you boxed into a less favourable interpretation.
Consider an entrepreneur who leaves Canada mid-year and maintains some secondary ties. Your tax advisor might recommend specific steps to strengthen your non-resident position before formally establishing it with the CRA. Filing Form NR73 before completing these steps could result in a determination that you remained resident longer than necessary.
Simple Temporary Absences with Clear Ties
If you’re leaving Canada temporarily but maintaining significant residential ties, filing Form NR73 to confirm what you already know that you remain a factual resident serves no practical purpose.
For example, a professor taking a one-year sabbatical in France, while maintaining a home and family in Canada and planning to return to the same university position, remains a Canadian resident for tax purposes. Filing Form NR73 to confirm this status is unnecessary and only creates additional records with the CRA.
Pros and Cons of Filing Form NR73
Advantages
- Documentation for Third Parties: Provides official CRA correspondence about your residency status that can satisfy requirements from financial institutions, pension administrators, or foreign tax authorities
- Preliminary CRA Perspective: Offers insight into how the CRA views your specific combination of ties and circumstances, which can inform further planning
- Reduced Audit Risk: While not guaranteed, having filed Form NR73 and received a determination may reduce the likelihood of future residency audits, as you’ve proactively engaged with the CRA
- Peace of Mind: For individuals facing genuine uncertainty, receiving the CRA’s opinion can provide comfort, even if non-binding
- Supporting Evidence: If your residency status is later questioned, a Form NR73 determination showing you acted in good faith based on CRA guidance may support your position
Disadvantages
- Non-Binding Opinion: The determination provides no legal protection. The CRA explicitly states that the opinion “is not binding on the CRA and may be subject to a more detailed review at a later date.”
- Creates an Official Record: Filing Form NR73 documents your residency position with the CRA, which could later be used against you if circumstances or interpretations change
- Processing Delays: The CRA uses its Residency Determination Advisory system to process requests, and response times vary. You may face uncertainty while waiting for the determination
- Incomplete Picture: The determination is based entirely on the information you provide. If you omit details or your situation changes after filing, the opinion may not reflect reality
- May Box You into a Position: If the CRA determination is less favourable than you hoped, you may feel pressure to accept that interpretation rather than pursuing a more advantageous position
- Alternative Options May Be Better: For situations requiring certainty, a binding advance income tax ruling from the Income Tax Rulings Directorate provides actual legal protection that Form NR73 cannot
How to Complete Form NR73
If you decide that filing Form NR73 serves your interests, complete accuracy is essential. The CRA’s determination will only be as reliable as the information you provide.
Getting the Form
Form NR73 is available on the CRA website at canada.ca. The form comes in two versions: an accessible fillable PDF and a standard print PDF. You must download the accessible fillable PDF to your computer and open it in Adobe Acrobat Reader 10 or later—the form will not work correctly if opened directly in a web browser.
Critical Information to Include
The CRA emphasizes that it’s “critical that the taxpayer provide all of the details concerning his or her residential ties with Canada and abroad.” This includes:
- Significant residential ties: Dwelling places in Canada and abroad, location of spouse/common-law partner and dependants
- Secondary residential ties: Personal property, social ties, economic ties, provincial health coverage, driver’s licenses, bank accounts, investments
- Departure details: Actual or planned departure date, reason for leaving, expected duration of absence
- Return intentions: Whether you plan to return to Canada, and if so, when and under what circumstances
- Foreign residential ties: Residential ties you’re establishing or have established in your new country
What Happens After Filing
After submitting Form NR73, the CRA uses its Residency Determination Advisory system to process your request. According to the CRA, “In most cases, the CRA will be able to provide an opinion regarding a taxpayer’s residence status from the information recorded on the completed form.”
The CRA’s Response
The CRA will send a letter providing its opinion on your residency status. This determination may classify you as:
- Non-resident: You severed significant residential ties and are not resident in Canada for tax purposes
- Factual resident: You maintained significant residential ties and remain resident in Canada despite your physical absence
- Deemed resident: You fall under specific categories in subsection 250(1) of the Income Tax Act, such as sojourning in Canada for 183 days or more
- Deemed non-resident: You maintain ties in both Canada and a treaty country, and treaty tie-breaker rules determine you’re resident in the other country
Supporting Documentation May Be Required
The CRA states that the opinion may be “subject to a more detailed review at a later date and supporting documentation may be required at that time.” Don’t assume the Form NR73 determination represents your final interaction with the CRA on residency matters.
Read Also: Deemed Disposition Canada: Complete Legal Guide
Common Pitfalls to Avoid
Treating the Opinion as Binding
The most serious mistake is believing the CRA’s Form NR73 determination is final. It is explicitly non-binding. You cannot depend on it for significant tax planning involving millions of dollars in potential departure tax. If you need certainty, consider seeking an advance income tax ruling instead.
Filing Too Early
If you file Form NR73 before finalizing your exit strategy, you may receive a determination based on incomplete information. Consider working with a tax advisor to optimize your residential tie severance before documenting your position with the CRA.
Omitting Material Information
Since the determination is “based entirely on the facts provided by the taxpayer,” omissions or inaccuracies will produce unreliable results. Include all residential ties, even those you consider minor. The CRA evaluates the complete picture.
Not Updating Changed Circumstances
If your situation changes after filing Form NR73, the original determination may no longer apply. A business owner who plans to sever all ties and then decides to keep a vacation property in Canada has materially altered the facts. The old determination based on complete tie severance no longer reflects reality.
Using Form NR73 When You Need a Ruling
For high-stakes situations involving significant tax consequences, Form NR73’s non-binding opinion is insufficient. According to Income Tax Folio S5-F1-C1, advance income tax rulings are available “where certainty is required in respect of the tax consequences.” Don’t use the wrong tool for critical planning.
Professional Guidance: When to Hire Experts
Residency determination involves interpreting complex legal concepts, including “ordinarily resident,” “significant residential ties,” and treaty tie-breaker rules. For wealthy individuals planning permanent emigration, professional tax and legal advice is essential.
Consider engaging qualified professionals when:
- You maintain substantial assets in Canada after emigrating
- You face significant departure tax liability
- You’re establishing residency in a country with a tax treaty with Canada
- You maintain business interests or employment relationships in both Canada and your new country
- You plan to maintain a dwelling place in Canada
- Your family members remain in Canada while you relocate
- You need a binding advance ruling rather than Form NR73’s non-binding opinion
Tax lawyers specializing in Canadian emigration and international tax can help structure your departure to minimize tax consequences while ensuring compliance with all CRA requirements.
Conclusion
Form NR73 is a tool, not a requirement. For some individuals leaving Canada, requesting the CRA’s opinion on their residency status can provide valuable documentation or clarity. For others, filing creates unnecessary complications without meaningful benefit.
The key is understanding that this form delivers a non-binding opinion based entirely on information you provide. It cannot replace professional tax advice, nor can it provide the legal certainty that a binding advance income tax ruling offers.
If you’re leaving Canada with significant assets or complex residency ties, comprehensive exit planning goes far beyond Form NR73. Proper planning addresses departure tax calculations, timing strategies, treaty considerations, and post-departure obligations.
For detailed guidance on the complete Canadian exit process, see our comprehensive Exiting Canada Legal Guide. If you’re ready to begin planning your permanent departure, our Leaving Canada Permanently resource provides the strategic framework for a successful transition.
Sources:
Form NR73, Determination of Residency Status (leaving Canada) – https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/nr73.html
Income Tax Folio S5-F1-C1, Determining an Individual’s Residence Status – https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html
Determining your residency status – https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html
Residency status determination – https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/film-media-tax-credits/residency-status-determination.html
Evaluation – CRA’s Management of Individual Non-Resident Taxpayers – https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/internal-audit-program-evaluation/internal-audit-program-evaluation-reports-2025/cra-management-inrt.html
Leaving Canada (emigrants) – https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html
Government employees outside Canada – https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/government-employees-outside-canada.html
Working in Canada Temporarily – https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc643/working-canada-temporarily.html
