Bringing money from overseas

[desi2012]

I have some doubts about bringing money to Canada from India.
I talked to one local agent regarding this and his answer made me curious. He said that can be easily done and everything will be done in such a way that I do not have to pay any taxes in Canada.
Please note that the money in India is legal on which proper taxes have been paid.
I am wondering if he has some escape route or are there really no taxes to be paid in Canada.
Can the experts please shed some light on this?

On another note, is there a possibility to give that money(in INR) to a friend's relative in India and in return take CAD from the Canadian friend?
Are there any tax implications for any of us in this transaction?

Thanks in advance.

 

[hobbes]

1. There is no issue transferring money from abroad into Canada.
If you reside in Canada, you have to pay taxes on your worldwide income whether you get the money into Canada or not.

2. You need to check RBI rules for this - Canada doesn't care. AFAIK, RBI regulations require that any money loaned by an NRI in INR needs to be paid back in INR only. There are no tax implications for interest free loan.

 

[desi2012]

1. There is no issue transferring money from abroad into Canada.
If you reside in Canada, you have to pay taxes on your worldwide income whether you get the money into Canada or not.

Thanks for the reply.
This is exactly what I am trying to ask. There is no income here, money is already there and taxes have been paid (or will be paid) in India. I just need to transfer the money.

 

[hobbes]

If the money was earned before you were a Canadian resident, then there are no taxes to be paid to Canada.

But if it is an income (rental income or interest or capital gains) that you earned while you were a Canadian resident, then taxes will have to be paid in Canada.

All this is irrespective of whether the money stays in India or brought into Canada.

 

[desi2012]

All this is irrespective of whether the money stays in India or brought into Canada.

Thanks for reply.
I am now aware that I do not have to pay taxes in Canada since I had earned the money before I became a PR.
I am more worried about the channel of money transfer in the second case. e.g. giving money to someone in India and taking CAD equivalent here. How does that transaction stand legally in Canada?

 

[hobbes]

I am more worried about the channel of money transfer in the second case. e.g. giving money to someone in India and taking CAD equivalent here. How does that transaction stand legally in Canada?

There is no problem with this as far as Canada is concerned. You may be restricted by RBI regulations though.

 

[Amadan123]

Hello,

I'd just like to confirm the following, according to the information you have provided in your situation:

• funds brought into Canada will not be taxed upon arrival
• worldwide income earned while a resident of Canada will be taxed
• after-tax Canadian income can be transferred
• any assets you own, like investments, rental property, etc. upon arrival won't be taxed when you enter Canada, but may be upon departure from Canada

I hope that helps.

Madan Chartered Accountant team
www.madanca.com

 

[steaky]

• • departure from Canada

  Departure here refers as cease to be resident of Canada for tax purposes.

 

[desi2012]

Thank you all for the replies

• funds brought into Canada will not be taxed upon arrival
• worldwide income earned while a resident of Canada will be taxed
• after-tax Canadian income can be transferred
• any assets you own, like investments, rental property, etc. upon arrival won't be taxed when you enter Canada, but may be upon departure from Canada

I was little worried about the taxes, but I am more worried about the transfer channel that I plan to use for CAD to INR conversion. Is it okay to transfer money in this way i.e. take CAD from someone in Canada and give INR to his relatives in India?

 

[Amadan123]

Good clarification, steaky.

desi2012, there was discussion before that the money to be transferred received will be after-tax and legal. If that is the case, then there won't be issues.

Madan Chartered Accountant team
www.madanca.com

 

[Suin]

Won't it be the double taxation if the tax on income is paid both overseas and in Canada?

 

[Suin]

Another question - are there any charges paid on the incoming sum to the bank or to the government on the time of being deposited to the bank account?

 

[Amadan123]

Suin,

Foreign tax credits will prevent the double-taxation.

Income is taxed based on the country to which it is sourced. The sourcing country will get to tax the income first. You get to use this tax paid to the first country as a foreign tax credit in the second country (if the second country taxes the same income as well).

Madan Chartered Accountant team
www.madanca.com

 

[AKJ]

Hello Experts,

May be I am repeating the question ...

Not concerned about any goods, as I won't be importing any of them.

Wanted to know, if while doing PR landing do we need to declare the money that will be transferred over wire later ? I am in process of house selling deal, selling MF's etc ...

Any CBSA or CRA website link to refer ?

Thanks!

 

[steaky]

Hello Experts,

May be I am repeating the question ...

Not concerned about any goods, as I won't be importing any of them.

Wanted to know, if while doing PR landing do we need to declare the money that will be transferred over wire later ? I am in process of house selling deal, selling MF's etc ...

Any CBSA or CRA website link to refer ?

Thanks!

No, you don't declare funds that are to be wired later.

Google: cbsa + capital gains