If you’ve left Canada and the CRA considers you a non-resident, withdrawing from your Registered Retirement Savings Plan triggers a flat 25% Canadian withholding tax on the gross amount. Your financial institution takes that tax off the top before releasing the funds, and it applies whether you pull out $3,000 or $300,000. A tax treaty between Canada and your new country of residence can reduce the rate on certain recurring pension payments, and filing an optional Canadian return under Section 217 may recover some of the tax if your Canadian-source income is modest. Those are the RRSP withdrawal rules for non-residents of Canada in one paragraph. The rest is detail, sequence, and paperwork.
Confirm You’re Actually a Non-Resident First
The 25% rate only applies once the CRA treats you as a non-resident. That determination turns on your residential ties with Canada. Primary ties carry the most weight: a home available to you in Canada, a spouse or common-law partner who stayed behind, dependents living there. Keep the house and the family in Canada, and the CRA will likely still consider you a resident no matter where you spend your time.
Secondary ties matter in the aggregate. Canadian bank accounts, a Canadian driver’s licence, active provincial health coverage, club memberships. Any one is harmless. A cluster of them, especially when the primary ties are ambiguous, can pull you back into resident status.
You can ask the CRA for a written opinion by filing Form NR73, Determination of Residency Status (Leaving Canada).1Canada Revenue Agency (CRA). Determining Your Residency Status The opinion isn’t technically binding, but your financial institution will rely on your confirmed non-resident status when it decides which rate to apply. Getting it in writing before your first withdrawal avoids arguments about which rate should have been used.
When you qualify as a tax resident of both Canada and another country under each country’s domestic rules, the applicable treaty’s tie-breaker tests decide. Under the Canada–U.S. treaty, the tests run in sequence: permanent home, then closer personal and economic ties, then habitual residence, then citizenship, with the two tax authorities negotiating if none produce an answer.2Internal Revenue Service. Treasury Department Technical Explanation of the Convention Between the United States of America and Canada Other Canadian treaties follow a similar pattern with variations.
The 25% Default Rate on Withdrawals
Non-residents pay a flat 25% Part XIII withholding tax on RRSP withdrawals regardless of amount.3Canada.ca. Rates for Part XIII Tax This is where non-residents get surprised, because Canadian residents face a tiered structure: 10% on the first $5,000, 20% on amounts between $5,001 and $15,000, and 30% above $15,000.4Canada.ca. Tax Rates on Withdrawals Those tiers no longer apply once you’re a non-resident. The 25% comes off gross, and you receive the net.
For Part XIII purposes, that withholding is generally your final Canadian tax obligation on the withdrawal. You don’t need to file a Canadian return unless you elect to under Section 217, discussed below.
When a Treaty Reduces the Rate
Canada’s tax treaties can bring the rate below 25%, but only in narrow circumstances. The reduction almost always applies to periodic pension payments, not to lump-sum withdrawals. This is the point where most non-residents lose money by assuming a treaty rate covers everything.
Periodic Payments Versus Lump Sums
Under the Income Tax Conventions Interpretation Act, a “periodic pension payment” means a recurring payment from a qualifying plan like an RRSP or RRIF. It explicitly excludes RRSP payments taken before the plan matures and any lump-sum commutation payments.5Canada Revenue Agency (CRA). Applicable Rate of Part XIII Tax on Amounts Paid or Credited to Persons in Countries With Which Canada Has a Tax Convention Cashing out an RRSP in a single withdrawal attracts the full 25%, even where your country has a treaty that would reduce the rate on periodic pensions.
The CRA distinguishes based on how the payment originates. Monthly installments under a single standing instruction count as periodic. A one-off withdrawal request, or several one-off requests within a year, count as lump sums.
The Canada–U.S. Treaty: 15% on Periodic Pensions
For U.S. residents, Article XVIII of the Canada–United States Income Tax Convention caps withholding on periodic pension payments at 15%.6Internal Revenue Service. United States – Canada Income Tax Convention That covers recurring RRIF payments and annuity-style distributions from an RRSP after maturity. Lump-sum RRSP withdrawals stay at the domestic 25%, because the 15% cap is limited to a non-resident who “is the beneficial owner of a periodic pension payment.”7Canada.ca. Convention Between Canada and the United States of America
Residents of other treaty countries may see different rates. Some treaties match the 15% figure; some set a lower cap or exempt small amounts. Your financial institution needs your current country of residence on file to apply the right rate. If you’ve moved from one treaty country to another since leaving Canada, update the institution before your next withdrawal.
Paperwork to Get the Reduced Rate
A treaty rate does not apply automatically. You have to request it, and the request goes to the CRA, not to your financial institution.
Form NR5
Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld, is the formal request for a rate below 25%.8Canada Revenue Agency (CRA). NR5 Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld You file it with the CRA before the withdrawal, listing your country of residence, the relevant treaty article, and the estimated income you expect to receive.
If the CRA approves the NR5, it sends an authorization letter to your financial institution directing it to withhold at the reduced rate. Without that letter, the institution has no choice but to apply 25%. An approved NR5 remains valid for five tax years before you need to renew.9Canada Revenue Agency (CRA). Important Reminder if You Filed Form NR5 File it well before your first payment to allow processing time.
Form NR4
After each calendar year, your financial institution issues Form NR4, Statement of Amounts Paid or Credited to Non-Residents of Canada, reporting the gross withdrawal and the tax withheld. The institution must send it to you by the last day of March following the calendar year.10Canada.ca. Distributing NR4 Slips to Recipients
The NR4 is what you use when filing taxes in your country of residence. In the United States, the Canadian tax on the NR4 feeds into the foreign tax credit calculation on Form 1040 so the same income isn’t taxed twice. Keep the NR4 with your tax records. It’s your only proof of Canadian tax paid.
RRIFs and the Age-71 Deadline
December 31 of the year you turn 71 is the last day you can hold an RRSP, whether you live in Canada or abroad.11Canada.ca. RRSP Options When You Turn 71 By that date you must convert to a Registered Retirement Income Fund, purchase an annuity, or withdraw the full balance. Most non-residents convert to a RRIF because it preserves the tax-deferred growth on the remaining balance.
Once the account is a RRIF, the CRA requires a minimum annual withdrawal based on your age and the account’s fair market value at the start of the year. The prescribed percentage rises with age. Each RRIF payment is subject to Part XIII withholding. Payments that qualify as periodic pension payments under a treaty benefit from the reduced treaty rate; for a U.S. resident with an NR5 on file, that’s 15% instead of 25%.12Internal Revenue Service. Publication 597, Information on the United States-Canada Income Tax Treaty
Any amount withdrawn from a RRIF above the scheduled periodic payments is treated as a lump sum and taxed at 25%. If you want more than your regular payment in a given year, the extra doesn’t inherit the treaty rate.
Recovering Withholding With a Section 217 Election
Non-residents receiving RRSP or RRIF income can elect under Section 217 of the Income Tax Act to file a Canadian T1 return and potentially recover some of the Part XIII tax already withheld.13Canada Revenue Agency (CRA). Electing Under Section 217 – Who Can Elect The election taxes you on your Canadian income at graduated rates, like a resident, rather than at the flat 25%. When your Canadian income is low, graduated rates plus personal credits beat 25% flat.
When the Election Helps, and When It Doesn’t
The math works in your favor when your total eligible Canadian-source income is modest. Filing lets you claim non-refundable tax credits, including the basic personal amount of $16,452 for 2026. If the credits reduce your calculated tax below what was already withheld, the CRA refunds the difference.
The election isn’t always beneficial. Substantial Canadian-source income can push the graduated rate above the flat 25%. Run the numbers both ways before filing.
The 90% Rule
How much of the personal credits you can actually claim depends on the share of your worldwide income that comes from Canada. If 90% or more of your net world income is Canadian-source, you get the full credits. Below that threshold, the credits are prorated and drop sharply in value.14Government of Canada / Canada Revenue Agency (CRA). Schedule B – Allowable Amount of Federal Non-Refundable Tax Credits A non-resident earning a large foreign salary and taking a small RRSP withdrawal will find the credits shrink close to zero after proration.
How and When to File
You file a T1 General Income Tax and Benefit Return with Schedule A, Statement of World Income. You report only your Canadian-source income as taxable income, but you must disclose your worldwide income on Schedule A because the CRA uses it to calculate the credit proration.15Canada.ca. Schedule A – Statement of World Income You must include all eligible Canadian income in the return. You cannot pick and choose which RRSP or RRIF payments to report.
The deadline is June 30 of the year following the tax year. The CRA will not accept the Section 217 election after that date.16Canada.ca. When to File a Section 217 Return Use the NR4 to report the gross income and the tax already withheld. The withholding is credited against your calculated tax, and any overpayment comes back as a refund.
One Note for U.S. Residents
The Canadian side of the picture is only half of what a U.S. resident has to think about. The IRS treats RRSP and RRIF distributions as taxable income, and additional reporting obligations may apply, including FinCEN Form 114 (the FBAR) for foreign accounts exceeding $10,000 in aggregate at any point in the year and Form 8938 above its higher thresholds.17Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR) Some states don’t recognize the Canada–U.S. treaty’s deferral of tax on income accruing inside an RRSP and may tax that growth annually while denying credits for Canadian withholding, producing genuine double taxation. If you’re a U.S. resident, price the full combined cost before you withdraw.