CRA Non-Resident Tax Audit 2025 — Protect Your Global Assets, Prevent Double Taxation, and Eliminate CRA Penalties

In 2025, CRA’s Non-Resident and Cross-Border Tax Audit Division is tightening enforcement under new international data-sharing agreements. CRA now automatically receives financial account information from over 100 countries under the OECD Common Reporting Standard. Thousands of Canadians living abroad and foreign investors with Canadian assets are facing unexpected reassessments for undeclared income, withholding tax discrepancies, or residency misclassification. Many are being double-taxed due to CRA’s flawed residency assumptions. At Mackisen CPA Auditors Montreal, we defend non-residents, global investors, and expatriates from unfair CRA audits. Our CPA auditors and international tax lawyers analyze treaty protections, correct residency status, and negotiate full penalty relief. We don’t let CRA’s global data trap honest taxpayers — we protect your wealth and your international reputation.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 2(3): Defines the taxation of non-residents on Canadian-sourced income.

• Section 115(1): Sets out income rules for non-resident individuals and corporations.

• Section 212(1): Governs withholding taxes on rent, interest, dividends, and other payments to non-residents.

• Section 216(1): Permits elective filing for non-residents earning rental or timber income in Canada.

• Section 220(3.1): Authorizes CRA to cancel penalties and interest under the Taxpayer Relief Program.
  Tax Treaties and International Agreements

• OECD Common Reporting Standard (CRS): CRA receives automatic account data from foreign jurisdictions.

• Canada–U.S. Tax Treaty and Other Bilateral Agreements: Prevent double taxation and define residency rules — Mackisen ensures these are applied correctly to your case.
  Tax Administration Act (Quebec)
  Revenu Québec audits provincial taxes for Quebec-based non-resident property owners or businesses. Mackisen manages both CRA and Revenu Québec compliance simultaneously.

Key Court Decisions

Bédard v. The Queen (2022): CRA must prove Canadian residency through factual ties, not assumptions.
Thibault v. The Queen (2022): Non-resident status is determined by intention and factual living circumstances, not mailing addresses.
Guindon v. Canada (2015): Honest reporting errors do not justify gross negligence penalties.
Brooks v. The Queen (2020): CRA cannot impose withholding tax twice when proper remittance documentation is provided.
These rulings confirm that CRA must respect international treaties, factual evidence, and good faith in all non-resident tax cases.

Why CRA Targets Non-Residents

CRA’s 2025 audit priorities include foreign ownership of Canadian real estate, cross-border employment income, and offshore investments. Common triggers include:

• Foreign property or bank accounts not reported on Form T1135.

• CRA assuming Canadian residency due to ties like property ownership or family.

• Non-residents receiving rent, dividends, or pension income without proper withholding.

• Multiple years of missing NR4 or Section 216 filings.
  CRA assumes evasion — Mackisen proves compliance and treaty protection.

Mackisen’s Non-Resident Audit Defense Strategy

1. Residency Review: Analyze factual residence, visa status, and international tax treaty protection.

2. Documentation & Treaty Application: Prepare residency tie evidence, foreign tax returns, and withholding proof.

3. Objection Filing: Submit a Notice of Objection challenging CRA’s residency or reassessment decision.

4. Double Taxation Elimination: Coordinate with foreign tax authorities to secure full foreign tax credits.

5. Penalty & Interest Relief: File under Section 220(3.1) for cancellation of all financial penalties.
   Our strategy restores compliance, protects cross-border integrity, and eliminates unfair tax exposure.

Real Client Experience

A U.S.-based investor was reassessed $348,000 for “Canadian residency.” Mackisen proved U.S. residency under the tax treaty and CRA cancelled the reassessment in full.
A Montreal non-resident landlord faced $94,000 in penalties for missed withholding filings. Mackisen filed Section 216 elections and CRA waived all charges.

Common Questions

Can CRA audit non-residents living outside Canada? Yes — but Mackisen limits CRA’s jurisdiction and enforces treaty rights.
Can CRA tax the same income twice? No — Mackisen prevents double taxation through treaty-based appeals.
What if CRA says I’m a resident of Canada? Mackisen proves your factual residency abroad with documentation and legal precedent.
Can CRA cancel penalties for non-residents? Absolutely — we secure full relief through the Taxpayer Relief Program.

Why Mackisen

At Mackisen CPA Auditors Montreal, we are Canada’s global tax defense leaders. Our CPA auditors and international tax lawyers have decades of experience protecting non-residents, dual citizens, and foreign investors from CRA’s cross-border overreach. We act quickly, negotiate globally, and defend relentlessly — because your global income deserves protection, not duplication. When CRA audits your residency, Mackisen audits their reasoning.
Call Mackisen CPA Auditors Montreal today for your 2025 Non-Resident Audit Defense Consultation. The first meeting is free, and your protection starts immediately.