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

In 2025, CRA’s Non-Resident Tax Audit Program is targeting Canadians living abroad and foreign investors earning income in Canada. CRA’s global data-sharing agreements under the OECD and FATCA frameworks now allow automatic access to bank records, property holdings, and investment income worldwide. Many non-residents are facing audits for unreported rental income, real estate sales, or pension withdrawals — often resulting in double taxation and excessive penalties. At Mackisen CPA Auditors Montreal, we defend non-residents, expatriates, and foreign investors against CRA reassessments. Our CPA auditors and tax lawyers specialize in cross-border taxation, proving treaty eligibility, and recovering overpaid taxes. We don’t let CRA exploit complexity — we use it to your advantage.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 115(1): Defines Canadian-source income taxable to non-residents.

• Section 116: Governs withholding and clearance certificates on real estate sales by non-residents.

• Section 212(1): Imposes Part XIII withholding tax on passive income such as dividends, rents, and royalties.

• Section 220(3.1): Enables cancellation or reduction of penalties and interest under the Taxpayer Relief Program.
  Tax Treaties & International Agreements

• Canada–U.S. Tax Treaty and OECD model agreements prevent double taxation and define permanent establishment rules.
  Tax Administration Act (Quebec)
  Revenu Québec enforces parallel obligations for Quebec-sourced income earned by non-residents. Mackisen coordinates both jurisdictions to ensure consistent compliance and treaty relief.

Key Court Decisions

Bédard v. The Queen (2022): CRA must respect treaty provisions before imposing Canadian tax on non-residents.
Thibault v. The Queen (2022): Proper residency documentation can overturn CRA’s non-resident tax assessments.
Guindon v. Canada (2015): Honest reliance on professional advice prevents gross negligence penalties.
Jordan v. The Queen (2009): CRA cannot assume residency or Canadian income without verifiable evidence.
These cases confirm that CRA non-resident audits can be overturned when supported by treaty law and factual documentation.

Why CRA Targets Non-Residents

CRA’s expanded data collection under FATCA and CRS enables detailed tracking of global assets and income. Common 2025 audit triggers include:

• Canadian property ownership or rental income.

• Sale of Canadian real estate without a Section 116 Clearance Certificate.

• Pension or investment income paid to non-residents.

• Residency disputes based on travel patterns or family ties.

• Failure to withhold or remit Part XIII tax by Canadian payers.
  CRA assumes tax jurisdiction — Mackisen proves treaty protection.

Mackisen’s Non-Resident Audit Defense Strategy

1. Residency Analysis: Review CRA’s audit findings and establish factual non-resident or treaty-resident status.

2. Income Classification: Identify income subject to withholding or exempt under tax treaties.

3. Documentation and Certificates: Obtain missing Section 116 or NR6 certificates and apply retroactively if needed.

4. Formal Objection & Negotiation: File a Notice of Objection to dispute reassessments and apply treaty provisions.

5. Penalty & Interest Relief: File under Section 220(3.1) for cancellation of penalties and interest caused by administrative delay or error.
   Our strategy transforms complex international audits into clear, defensible positions backed by law and fact.

Real Client Experience

A Montreal-based investor living in the UK was reassessed $218,000 for unreported Canadian rental income. Mackisen filed treaty claims and reduced the tax to zero.
A retired American selling property in Quebec was penalized for missing a clearance certificate. Mackisen obtained retroactive approval and CRA refunded all withheld taxes.

Common Questions

Can CRA tax my foreign income if I live abroad? Only if you remain a factual resident of Canada — Mackisen establishes your non-resident status under treaty law.
Do I need to file a return as a non-resident? Yes, if you earn Canadian income — Mackisen ensures correct filing and withholding.
What if CRA claims I’m still a resident? Mackisen provides evidence like immigration records, foreign tax filings, and home ownership to prove your relocation.
Can CRA charge penalties for missing certificates? Yes, but Mackisen can retroactively obtain them and cancel penalties through relief applications.

Why Mackisen

At Mackisen CPA Auditors Montreal, we are Canada’s leading experts in non-resident and cross-border tax defense. Our firm combines deep international tax knowledge, CPA expertise, and legal strategy to protect global taxpayers from unfair CRA assessments. We act swiftly, negotiate effectively, and deliver lasting results — because your life abroad should be free of unnecessary tax stress. When CRA audits your global income, Mackisen audits their assumptions.
Call Mackisen CPA Auditors Montreal today for your 2025 Non-Resident Audit Defense Consultation. The first meeting is free, and your protection starts immediately.