Moving from Canada to Panama
When you stop being a Canadian resident, the Income Tax Act treats you as having disposed of your property just before you left, with some exceptions such as Canadian real estate.
If your property was worth more than CAD 25,000 when you left, you file Form T1161. There is no double tax treaty between Canada and Panama, only an information exchange agreement. This is Canadian law: check it with a Canadian tax professional.
The departure tax
Section 128.1 of the Income Tax Act deems a taxpayer who ceases to be resident to have disposed of their property immediately before. The Canada Revenue Agency lists exceptions, among them Canadian real estate and property of a business carried on in Canada through a permanent establishment.
Source: Income Tax Act, section 128.1; Canada Revenue Agency, dispositions of property
Forms T1161 and NR73
- Form T1161: if the fair market value of all your property when you left was more than CAD 25,000. Some sites say 250,000; the CRA says 25,000.
- Form NR73 is the Determination of Residency Status for people leaving Canada.
Source: Canada Revenue Agency, leaving Canada as an emigrant; Canada Revenue Agency, Form NR73
No treaty, one agreement
Panama is not among Canada’s tax treaties in force, signed or under negotiation, according to Finance Canada. A Canada Panama treaty limiting pensions to 15% does not exist. What exists is a tax information exchange agreement, signed in March 2013 and in force since December 6, 2013.
Source: Finance Canada, tax treaties; Finance Canada, tax information exchange agreements
In Panama
Panama taxes only income produced in Panama, so a Canadian pension paid to you here is outside its territorial rule.
Source: Fiscal Code of Panama, article 694
Questions people ask
Do I have to file the NR73?
The CRA publishes it as the form to determine residency status when leaving. Whether it is mandatory is a question for a Canadian tax professional.
Does Panama tax my CPP or OAS?
Panama does not tax income produced abroad.
What the law does not say
- Whether Form NR73 is mandatory or optional.
- Canada’s withholding on pensions paid to non-residents. We have not read it in an official source.
Official sources
- Income Tax Act of Canada, section 128.1
- Canada Revenue Agency, dispositions of property when leaving Canada
- Canada Revenue Agency, leaving Canada as an emigrant
- Canada Revenue Agency, Form NR73
- Finance Canada, tax treaties
- Finance Canada, tax information exchange agreements
Last verified: October 28, 2026
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