The good news: you don’t lose your CPP or OAS by leaving Canada. Both continue to be payable regardless of where you live. The less great news: as a non-resident, withdrawals are subject to withholding tax — and neither Panama nor Paraguay has a tax treaty with Canada to reduce that rate. Here’s exactly what to expect and how to receive your pension efficiently from abroad.
Ready to stop paying Canadian taxes legally? See our Escape Canada package — we handle the residency, banking, and tax structure in one done-for-you service. Or book a $49 consultation call to map your specific situation first.
Canada Pension Plan (CPP): Basics for Expats
CPP is a contributory pension — you receive it based on how much you contributed during your working years in Canada, regardless of where you live at retirement. Unlike OAS (which has a residency component), CPP is purely contribution-based. Moving abroad doesn’t affect your CPP entitlement.
Key CPP facts for expats:
- You can start CPP as early as age 60 (at a reduced rate) or as late as 70 (at an enhanced rate); the standard start is 65
- Delaying CPP increases your monthly amount by 0.7% per month (8.4% per year) after age 65, up to a 42% increase for starting at 70
- CPP is indexed to inflation — payments increase each year with the Consumer Price Index
- CPP can be received in a foreign bank account via international wire (see “How to Receive Payments Abroad” below)
- No minimum time in Canada is required to receive CPP after you’ve stopped contributing
CPP Withholding Tax for Non-Residents
CPP payments to non-residents are subject to 25% non-resident withholding tax (reduced under treaty for residents of treaty countries).
Unlike income tax for residents (where CPP is included in taxable income and taxed at marginal rates), the 25% withholding on CPP is typically the final Canadian tax on those payments. You report the gross amount and the 25% withheld; the withheld amount is not creditable against income tax in Canada (because you’re not filing a Canadian income tax return for that income).
Example: Your monthly CPP is $1,200. Canada withholds $300 (25%) and sends you $900 net to your foreign bank account. Your net monthly CPP as a non-resident in a non-treaty country: $900.
Old Age Security (OAS): Basics for Expats
OAS is a residency-based pension — you receive it based on how long you’ve lived in Canada as an adult, not on contributions. The maximum OAS is received after 40 years of Canadian residency after age 18. Partial OAS is available for shorter periods (minimum 10 years of residency after age 18 to receive any OAS).
OAS is available starting at age 65. You can defer OAS up to age 70 for an enhanced payment (0.6% per month increase for each month deferred after 65, up to 36% for deferral to 70).
OAS Residency Requirements
For OAS while living abroad as a non-resident, you must have at least 20 years of Canadian residency after age 18. If you have fewer than 20 years of Canadian residency, you must remain in Canada (or return) after reaching pension age to receive OAS.
| Years of Canadian Residency After 18 | Eligibility to Receive OAS Abroad | Payment Amount |
|---|---|---|
| 10–19 years | No (must reside in Canada to receive) | Partial |
| 20–39 years | Yes | Partial (years ÷ 40 × maximum OAS) |
| 40+ years | Yes | Full maximum OAS |
Note: Social security agreements between Canada and other countries can allow residency in the agreement country to count toward the OAS residency requirement. Canada has such agreements with many countries — but not with Panama, Paraguay, Uruguay, or Colombia (as of 2024).
OAS Withholding Tax for Non-Residents
OAS payments to non-residents are subject to 25% non-resident withholding tax (reduced under treaty). Same structure as CPP: the withholding is typically the final Canadian tax on those payments. No additional Canadian income tax is owing.
You must inform Service Canada of your non-resident status. They will update your payment records and begin applying withholding tax automatically.
OAS Clawback as a Non-Resident
The OAS clawback (formally: OAS Recovery Tax) applies to higher-income OAS recipients. For 2024, if your net income exceeds approximately $90,997, your OAS is reduced by 15 cents for every dollar above that threshold. Full clawback occurs at approximately $148,000.
As a non-resident, the clawback calculation continues — but it’s applied against your worldwide income as reported on any Canadian tax return you’re required to file. If you’re receiving OAS as a non-resident and your only Canadian income is OAS (with 25% withholding as the final tax), you don’t file a Canadian income tax return for that income, and the clawback is not separately assessed. However, this is a nuanced area — if you have Canadian-source income requiring a tax return, the clawback may apply. Get professional advice if your income is near the clawback threshold.
Guaranteed Income Supplement (GIS) and Non-Residents
The Guaranteed Income Supplement (GIS) is a non-taxable supplement to OAS for low-income seniors. GIS is not payable to non-residents — it requires Canadian residency. If you’re living abroad and receiving OAS, GIS is not available to you.
How to Receive Payments Abroad
Both CPP and OAS can be received in a foreign bank account via international wire. The setup process:
- Contact Service Canada — inform them of your move abroad and request to update your payment to international direct deposit. Call 1-800-277-9914 or visit Canada.ca/cpp-oas for the international payment form.
- Provide your foreign bank account details — account number, bank name, bank address, SWIFT/BIC code, and the local bank’s routing information. For Panama: use Banco General’s SWIFT code BAGEPAPA. For Paraguay: Vision Banco.
- Allow 2–3 payment cycles for the change to take effect — maintain a Canadian bank account initially to receive payments while the international setup processes.
- File Form NR75 or NR74 to notify the CRA of your non-resident status — this triggers the withholding tax adjustment and ensures CRA’s records match your Service Canada records.
Treaty Countries: Reduced Rates
Common country-by-country treaty withholding rates on CPP/OAS for non-residents:
| Country of Residence | CPP/OAS Treaty Rate |
|---|---|
| United States | 15% (periodic payments) |
| Germany | 15% |
| Netherlands | 15% |
| Spain | 15% |
| United Kingdom | 25% (no reduction in Canada-UK treaty for CPP/OAS) |
| Australia | 25% |
| Mexico | 15% |
| Panama | 25% (no treaty) |
| Paraguay | 25% (no treaty) |
| Colombia | 25% (no treaty) |
| Uruguay | 25% (no treaty) |
If you’re ready to move forward, see our Escape Canada package. We handle the Paraguay residency, offshore banking, and departure documentation as one complete service — so you leave cleanly and don’t leave money on the table.
FAQ
Do I lose my CPP if I leave Canada permanently?
No. CPP is based on contributions made during your working years, not on current residency. You receive whatever you’re entitled to based on your contribution record, regardless of where you live. You can receive CPP while living in Panama, Paraguay, Mexico, or anywhere else.
Can I receive OAS in Panama or Paraguay?
Yes, if you have at least 20 years of Canadian residency after age 18. OAS is payable abroad under this condition. Payments are subject to 25% withholding (no Canada-Panama or Canada-Paraguay treaty). Service Canada can deposit directly to your Panamanian or Paraguayan bank account via international wire.
Do I need to file a Canadian tax return to receive CPP/OAS as a non-resident?
Generally no — if your only Canadian income is CPP and OAS and 25% withholding is applied, you have no obligation to file a Canadian income tax return for that income. The withholding is the final Canadian tax. However, if you have other Canadian-source income (rental income, RRSP withdrawals, business income) in the same year, those may require filing a non-resident Canadian tax return (NR73).
Are CPP and OAS taxable in Paraguay and Panama?
Under their territorial tax systems, Panama and Paraguay do not tax foreign-source income — including Canadian pension payments. The 25% Canadian withholding is therefore your total tax on those payments. No additional local tax applies in Panama or Paraguay.
Essential tools when you leave
Anytime Mailbox — Virtual mailbox for receiving official mail and government correspondence while living abroad. Scan on demand, forward anywhere.
Airalo — eSIM cards for 200+ countries. Get data coverage the moment you land — no SIM swap required.
Related Articles
- How to Leave Canada: Complete Guide
- RRSP as a Canadian Non-Resident
- Canada Departure Tax Explained
- Offshore Banking for Canadians
- Best Countries for Canadians Moving Abroad
Practical note: Once you leave Canada, you may find your Canadian bank flagging logins from foreign IPs. A VPN like NordVPN solves this — connect to a Canadian server before opening your banking app and you’ll avoid the friction.
2026: Escape Canada package · leave Canada guide · Paraguay for Canadians · territorial tax countries.
Related: Escape Canada · Paraguay Residency
