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The short answer
When you are a non-resident of Canada living in Nigeria, CPP and OAS payments are subject to Part XIII non-resident tax, which the CRA says is usually 25% and withheld at source. The Canada-Nigeria tax agreement's pensions article (Article 18) lets Canada tax pensions under its own law with no percentage cap, so the treaty does not appear to reduce that rate. OAS recipients in Nigeria must also file the Old Age Security Return of Income each year, because Nigeria is not on the CRA's exempt-country list.
Retiring to Nigeria after decades in Canada changes how your Canadian pensions are taxed. You stop filing an ordinary Canadian return on them, and a flat withholding tax applies instead. For many retirees that is simpler, but it can also cost more than the tax they paid as residents. This article explains Part XIII tax, what the Canada-Nigeria agreement does and does not change, the extra OAS return, and the section 217 election that can bring some of the tax back.
What Part XIII tax is
The CRA's page for non-residents of Canada lists Old Age Security and Canada Pension Plan and Quebec Pension Plan benefits among the most common Canadian income subject to Part XIII tax, together with other pension payments, retiring allowances and annuities. The key points from that page:
- The payer (here, Service Canada) deducts the tax before paying you.
- The usual rate is 25%, but a tax treaty between Canada and your country of residence may reduce it.
- If the right amount was withheld, Part XIII tax is your final Canadian tax on that income. It is not refundable by filing an ordinary return.
- You should not file a return to report this income unless you are electing to do so under section 217.
Telling Service Canada that you are a non-resident and naming Nigeria as your country of residence is what makes the correct amount come off. Whether you have become a non-resident at all depends on your ties to Canada; see tax residence in both Canada and Nigeria.
What the Canada-Nigeria agreement says about pensions
Canada and Nigeria signed their tax agreement in Abuja on 4 August 1992. Article 18 deals with pensions and annuities. It says pensions arising in one country and paid to a resident of the other may be taxed in the country of residence, and 'may also be taxed in the State in which they arise, and according to the law of that State'. Unlike the dividend and interest articles, which cap source-country tax at 15% and 12.5%, Article 18 sets no percentage limit. The only exemption in the article is for war veterans' pensions.
On that wording, Canada keeps the right to apply its domestic 25% rate to CPP and OAS paid to a Nigerian resident. Some other treaties cap pension withholding at a lower rate; the Nigerian agreement does not appear to. If Service Canada withholds at a different rate, ask it or the CRA to explain before assuming an error. For the treaty as a whole, see what the Canada-Nigeria tax treaty covers.
The extra return for OAS: OASRI
OAS has a second layer. Non-resident seniors receiving OAS must file the Old Age Security Return of Income (form T1136) each year, unless they live in a country on the CRA's exemption list. The CRA page (modified 8 May 2026) lists around 35 countries, including the United Kingdom and the United States. Nigeria is not on the list, so an OAS pensioner living in Nigeria files the OASRI.
- What it reports
- Your net world income, so the CRA can work out the OAS recovery tax (the 'clawback').
- 2025 threshold
- $93,454 of net world income; recovery tax is 15% of income above it.
- Deadline
- The 2025 return was due by 30 April 2026.
- If you owe
- Recovery tax may be deducted from monthly OAS, starting with the July 2026 payment.
- If you file late
- A penalty of 5% of the balance plus 1% a month (up to 12 months) where tax is owing. Filing on time also helps prevent Service Canada suspending your OAS.
Worked example (illustration only)
Example: a retiree in Abuja receives CPP of $900 a month and OAS of $700 a month. At 25%, $225 is withheld from CPP and $175 from OAS, so $675 and $525 arrive, $1,200 in total. If his net world income for 2025, including rent from a Lagos property, were $103,454, the excess over $93,454 is $10,000 and the recovery tax at 15% would be $1,500. Most retirees are well below the threshold, but the return is still required.
Section 217: when filing a return brings tax back
The CRA allows non-residents to elect under section 217 to file a return for certain Canadian pension income (Guide T4145). If you do, the Part XIII tax withheld is compared with the tax you would pay on your Canadian income at normal rates, and you may get some or all of it refunded. This tends to help retirees whose total income, including income from Nigeria, is modest, because normal Canadian rates on a small pension can be below 25%. The election is optional and has its own deadline in the guide; run the numbers, or ask a cross-border tax preparer, before you file.
The Nigerian side
Becoming resident in Nigeria brings Nigerian tax rules into play. PwC's Nigeria tax summary (reviewed 29 May 2026) says Nigerian residents are taxed on worldwide income, and lists certain foreign income that stays exempt when repatriated through approved channels; pensions are not in that list. Whether Nigeria taxes your Canadian pension, and whether it credits the Canadian tax withheld, should be confirmed with the Nigeria Revenue Service or a Nigerian tax adviser. For moving the money itself, see CPP paid into a Nigerian bank. This is information, not tax advice.
Where Pryme fits
A Pryme Personal account can receive money in US dollars, pounds or euros and hold naira, with local account details for each currency. Funds stay in the currency they arrived in until you Swap; the app shows the rate and the fee before you approve. Verifiable statements from VerifyDoc.ai can support the income figures you put on an OASRI.
Questions people ask
How much tax is taken from CPP if I live in Nigeria?
The CRA's usual non-resident rate is 25%. The Canada-Nigeria agreement's pensions article sets no lower cap, so expect 25% to be withheld at source.
Do I have to file the OAS return of income from Nigeria?
Yes. Nigeria is not on the CRA's list of countries exempt from the Old Age Security Return of Income, so OAS recipients living there file form T1136 each year.
Can I get back the 25% withheld from my Canadian pension?
Possibly, by electing under section 217 to file a return on your Canadian pension income. A refund depends on your total income; see CRA Guide T4145.
Is my OAS stopped if I move to Nigeria?
Not automatically. OAS outside Canada depends on your years of residence in Canada; filing the OASRI on time also helps avoid Service Canada suspending payments.
Sources
- Canada Revenue Agency: Non-residents of Canada (Part XIII tax) · accessed Oct 2026
- Global Affairs Canada Treaty Law database: Canada-Nigeria tax agreement, signed Abuja 4 Aug 1992 · accessed Oct 2026
- Canada Revenue Agency: Old Age Security Return of Income (modified 8 May 2026) · accessed Oct 2026
- Canada.ca: CPP and OAS international benefits, eligibility (modified 16 Oct 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, individual taxes (reviewed 29 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.