DoubleTaxationUnited States – Canada tax treaty: residence, 183 days, rates
Convention between Canada and the United States of America with respect to Taxes on Income and on Capital (signed 26 September 1980, amended by the Protocols of 14 June 1983, 28 March 1984, 17 March 1995, 29 July 1997 and 21 September 2007)
- Signed: 1980-09-26
- In force since: 1984-08-16
- Official text
If both countries treat you as resident
- A dual resident is deemed a resident of the State in which he has a permanent home available to him; if he has a permanent home in both States or in neither, of the State with which his personal and economic relations are closer (centre of vital interests). Art. IV(2)(a) of the Convention
- Residence includes liability to tax by reason of citizenship; a U.S. citizen or green-card holder who is not resident in Canada is a U.S. resident only with a substantial presence, permanent home or habitual abode in the U.S. and closer personal and economic relations with the U.S. than with any third State. Art. IV(1) of the Convention
- If the centre of vital interests cannot be determined, you are deemed a resident of the State in which you have an habitual abode. Art. IV(2)(b) of the Convention
- Habitual abode in both States or in neither — resident of the State of which you are a citizen; citizen of both or neither — the competent authorities shall settle the question by mutual agreement. Art. IV(2)(c), (d) of the Convention
Income: who taxes it
| Income | Treaty rule | Article |
|---|---|---|
| Salary (employment) | The country where the work is done may tax it. Exempt if all apply: no more than 183 days in any 12-month period; the employer is not resident there; the pay is not borne by its permanent establishment there. | Art. XV(2) |
| Self-employment, business, services | Country of residence; the other country taxes profits of a permanent establishment (fixed base) there, or if your stay there reaches 183 days in any 12-month period. | Art. VII |
| Pension | Source country: at most 15%; the country of residence relieves double taxation. | Art. XVIII(1)-(2) |
| State pension (social security) | Only the country of residence. | Art. XVIII(1)-(2) |
| Government service | Only the paying country. | Art. XIX |
| Government service pension | General rules for pensions apply. | Art. XIX |
| Rent from real estate | The country where the property is located may tax; the country of residence relieves double taxation. | Art. VI(1) |
| Dividends | Source country: at most 15%; the country of residence relieves double taxation. | Art. X(2)(b) |
| Interest (deposits, bonds, loans) | Only the country of residence. | Art. XI(1) |
| Royalties (copyright, licences) | Source country: at most 10%; the country of residence relieves double taxation. Other rates or exemptions apply in some cases (see the article). | Art. XII(2) |
| Sale of property or shares | Real estate: the country where it is located may tax. Shares of companies deriving their value mainly (over 50%) from real estate: the same. Other property: under certain conditions the source country may also tax (see the article). | Art. XIII |
| Other income | The source country may tax; the country of residence relieves double taxation. | Art. XXII(1) |
How double taxation is relieved
- Canada: credit for the tax paid in the source country, up to the country’s own tax on that income Art. XXIV(2)(a)
- United States: credit for the tax paid in the source country, up to the country’s own tax on that income Art. XXIV(1)
Data checked: 2026-11-10. A short summary for individuals; the full conditions, exceptions and protocols are in the treaty text. General information, not legal advice.