When someone passes away, when a company shuts down, or when a person leaves Canada permanently, certain tax responsibilities must be completed. In each of these cases, there is a legal and financial need to confirm that all taxes have been paid before distributing money, closing bank accounts, or transferring property.
This is where a CRA Clearance Certificate becomes important.
A CRA Clearance Certificate, also known as a certificate of clearance, CRA, is a document issued by the Canada Revenue Agency (CRA).
Whether you’re the executor of an estate, a business director closing a company, or an individual moving abroad, understanding the clearance certificate process can help you avoid unexpected tax consequences.
What is a CRA Clearance Certificate, and why do You Need It
The CRA Clearance Certificate is an official confirmation from the Canada Revenue Agency stating that all amounts owed to the CRA by a deceased person, their estate, or a corporation have been paid, or that the CRA has accepted security for the payment. In simple terms, it’s a final stamp of approval from the CRA that confirms all income tax matters have been taken care of. Without it, the CRA can later ask for unpaid taxes, even after the money or property has been distributed to beneficiaries or business partners.
There are several other terms people may use for the same certificate. These include CRA certification, CRA certificate of clearance, Canadian tax clearance certificate, and the Canadian tax clearance certificate. Regardless of what it’s called, the purpose is the same: to confirm tax compliance and protect those distributing assets.
When CRA Clearance Certificate is Required?
You need it if:
- You are the executor of an estate (someone has died)
- You are closing a corporation (clearance certificate for corporate dissolution)
- You are leaving Canada permanently and filing a final tax return
Without this certificate, you could be personally responsible for unpaid taxes, even after money or property has been shared or transferred.
Who Can Apply for a CRA Clearance Certificate in Canada
The person who applies for the CRA Clearance Certificate is usually the person legally responsible for handling the tax matters.
For estates, this is often the executor, estate trustee, or legal representative named in the will or appointed by the court. In the case of corporate dissolution, a director, officer, or authorized representative of the corporation will submit the clearance certificate application. For individuals leaving Canada, the person themselves or their representative can apply for the certificate as part of their tax preparation.
The CRA treats this person as the main contact. They are responsible for making sure all tax returns are filed, all taxes are paid, and that proper documents are submitted along with the application.
What Forms Are Required in the CRA Clearance Certificate Application?
To apply for a CRA Clearance Certificate, the most commonly used form is TX19, which asks for a Clearance Certificate. This form is used primarily when applying for a clearance certificate related to the estate of a deceased person.
The TX19 form asks for information about the deceased, the estate, any tax returns already filed, and details about the estate’s assets and liabilities. It also requires you to list all sources of income, including interest, capital gains, and property transfers.
In addition to the TX19 form, you will need to include other supporting documents, such as:
- A copy of the death certificate
- A copy of the will and the grant of probate, if available
- Notices of assessment from the CRA for previous tax years
- A detailed statement of the estate’s assets and liabilities at the date of death
- Copies of tax returns filed for the final year and any previous years if required
If you are applying for a certificate for corporate dissolution or emigration, different forms or supporting documents may be required. The CRA website provides guidance specific to those situations.
How to Apply for a CRA Clearance Certificate: Step-by-Step
Apply for a clearance certificate by following these steps:
Step 1: File All Final Tax Returns
Make sure you file all the required tax returns, such as:
1. T1 Terminal Return (final return for the deceased person)
2. T3 Trust return (for estate income)
3. T2 (for corporations)
This helps the CRA check if anything is still owed.
Step 2: Fill Out the TX19 Form
You can find this form on the CRA website. Fill it out carefully. It asks for:
1. Information about the person or business
2. Details of assets
3. What money has already been paid
Step 3: Ready All Supporting Documents
Supporting Documents in the CRA Clearance Certification request include:
1. A copy of the will
2. Death certificate
3. Notices of Assessment
4. Statement of income and assets
5. Any other legal documents required
Step 4: Send Documents to CRA
You can submit documents:
1. By mail to your local tax services office
2. Online using the CRA’s “Submit Documents” service
CRA Clearance Certificate Mailing Addresses by Region
| Region | CRA Office | Mailing Address | Fax (Canada & US) | Fax (International) |
|---|---|---|---|---|
| Nova Scotia, New Brunswick, PEI, Newfoundland & Labrador | Nova Scotia Tax Services Office (Estates and Trusts Audit) | 47 Dorchester Street, Sydney, NS B1P 6K3 | 1-833-712-2304 | 418-556-1852 |
| Quebec | Western Quebec Tax Services Office (Audit – Clearance Certificates) | 110-151 du Lac Ave, Rouyn-Noranda, QC J9X 0G7 | 1-833-712-2302 | 418-556-1853 |
| Ontario, Nunavut | GTA East Tax Services Office (Audit – Clearance Certificates) | 1050 Notre Dame Ave, Sudbury, ON P3A 5C1 | 1-833-712-2303 | 418-556-1853 |
| Manitoba, Saskatchewan, Alberta, Northwest Territories | Eastern Prairie Tax Services Office (Audit – Clearance Certificates) | P.O. Box 1022, Winnipeg, MB R3C 2W2 | 1-833-712-2305 | 418-556-1852 |
| British Columbia, Yukon | Coastal & Central BC Tax Services Office (Estates and Trusts Audit) | 9755 King George Blvd, Surrey, BC V3T 5E1 | 1-833-712-2308 | 418-556-1852 |
Clearance Certificate Situations and Required Forms
| Situation | CRA Certificate Needed? | Form Used |
|---|---|---|
| Person dies (Estate) | Yes | TX19 |
| Business closing | Yes | TX19 |
| Person leaving Canada | Sometimes | Varies |
CRA Clearance Certificate Processing Times
There is no set time for how long it takes to get a clearance certificate from the CRA. Processing times vary depending on the complexity of the file, whether all documents have been submitted correctly, and the CRA’s current workload.
In general, it can take several weeks to several months. If the CRA needs more information or finds issues with the tax filings, it will delay the process. That’s why it’s important to file all returns completely and accurately and respond quickly to any CRA requests.
What CRA Clearance Certificate Includes
A CRA Clearance Certificate is typically a letter issued on CRA letterhead. It includes a statement confirming that all required taxes have been paid or that acceptable security has been provided. The letter may also contain a file number, the name of the taxpayer or estate, and a note about what the certificate covers.
This document is important because it legally protects the person who distributes the assets. Once you have the certificate, you can distribute the remaining estate property, transfer company funds, or close out accounts with peace of mind.
What You Can Do After Getting a CRA Certificate in Canada
Once the CRA has issued the clearance certificate, you are authorized to distribute the remaining property or funds. For estates, this means giving heirs their inheritances. For companies, it means paying out remaining business income or assets to shareholders.
The certificate acts as a discharge from tax liability. This means that the CRA will not come back later asking for taxes related to the matters covered by the certificate, unless fraud or major errors are found.
If you distribute money or property without getting a clearance certificate, and it turns out that taxes were still owing, you may be held personally responsible for the unpaid amount. This is why it is recommended to wait until the certificate is received before making final distributions.
Special Cases: Estate, Corporate Closure & Emigration
Clearance Certificate for Estate
The executor must apply to protect themselves and follow the law. This is part of the estate clearance process in Canada.
Clearance Certificate After Death
Taxes must be filed up to the date of death. This includes any capital gains tax on estate.
CRA Certification for Corporate Closure
If a business is ending, directors must get a corporate dissolution clearance.
Final Tax Return for Emigrants
If you are leaving Canada, you must file your final return and may need a tax clearance certificate.
Protect Yourself with a CRA Clearance Certificate
The CRA Clearance Certificate is an important part of responsible tax management. Whether you’re an executor handling someone’s estate, a director closing down a company, or an individual emigrating from Canada, this certificate confirms that all your tax affairs are in order.
If you’re looking for expert help with clearance certificates or other tax matters in Canada, the accountants at Bestax are well-equipped to assist you. Their experience with Canadian tax law and CRA procedures can give you peace of mind at every step.
Getting support from a knowledgeable advisor not only saves time but also helps you stay compliant with CRA regulations, so you can focus on what matters most.
Quick FAQs
What is a CRA clearance certificate, and who needs it?
A CRA Clearance Certificate confirms that all taxes owed by a person, estate, or corporation have been paid. It is needed by legal representatives, executors, or business directors before distributing property or closing accounts.
When should you apply for a clearance certificate from CRA?
You should apply after filing all final and necessary tax returns and before distributing any assets. This ensures that no taxes remain unpaid when property is transferred.
Is a clearance certificate mandatory to distribute an estate in Canada?
It is not legally required, but the CRA strongly recommends it to avoid personal liability. Without it, the executor may be held responsible for unpaid taxes.
How do I fill out Form TX19 for a CRA clearance certificate?
You provide details about the estate, list assets and liabilities, and confirm all required tax returns have been filed. The form must be submitted with supporting documents like the death certificate and will.
How long does it take to receive a clearance certificate from CRA?
Processing can take several weeks to a few months, depending on the case’s complexity and the CRA workload. Delays may occur if tax returns are missing or incomplete.
What documents are required for a CRA clearance certificate?
Common documents include Form TX19, the death certificate, a copy of the will, notices of assessment, and a full list of the estate’s assets and debts. All required tax returns must also be filed.
Do corporations need a clearance certificate when dissolving?
Yes, corporations should request a clearance certificate before closing to ensure all corporate taxes are paid. This protects directors from future CRA claims.
Can I be personally liable if I don’t get a CRA clearance certificate?
Yes, the CRA can hold executors, legal representatives, or directors personally responsible for unpaid taxes if assets are distributed without a certificate. This includes both income tax and penalties.
What is the penalty for distributing estate funds without a clearance certificate?
There is no specific fine, but you may have to repay the amount of tax still owing out of your own pocket. This can include interest and penalties.
Can an accountant help with applying for a CRA clearance certificate?
Yes, accountants and tax professionals can assist with preparing tax returns, completing Form TX19, and ensuring all required documents are submitted correctly. Their help can also reduce processing delays.
Disclaimer: The information provided in this blog is for general informational purposes only. It is not legal advice and should not be relied on as such.
