Fresh PR : will i be taxed if i bring money from home country later ?

[redbulldz]

Hi,

As i just landed to Canada, i am stressed about the taxation of my money in the future. I brought with me the max i can take from my home country (Algeria, strong foreign regulation) and there is still an amount that i was planning to bring in cash when my mother comes in about 3 months (transfers are not allowed from Algeria).

Question is, will i be taxed on that amount if i put it in my account ? I don't wanna take any risk and i really need this money to invest in a house.

Thanks for your feed-backs

 

[steaky]

You might be taxed eventually (unless there is no income) regardless whether you bring it here or leave it in your home country because sooner or later you would have to file tax return and declare how money are in your overseas account.

 

[jc94]

You won't be taxed on money sitting in an account regardless of where it is. The tax people only care about income, money that you gain during the year.

That does include foreign interest income though. Say you have $1000 in Algeria and earn 1% you need to fill in that you earned $10 on that account (ideally gross and net including tax paid in Algeria) and you will be taxed on that. I don't know the exact value (it'll vary by province I believe) but it's likely about 20%. So I earned interest on UK accounts ... and had to pay Canadian tax on it. Which sucks (as most of it was UK interest free account) but is life.

Your best bet for avoiding tax, is to put it into a tax free Canadian savings account (TFSA).

 

[redbulldz]

Thanks for the answers. Logic that the tax applies only on incomes (even if i don't understand the principle of a double taxation !).
But in the case of money brought from your home country, how can you proof that this is not an income ?

Also, second case. I may sell my house in my home country to invest here in Canada. Will this money be taxed too ? Knowing that i will pay taxes on this transaction in Algeria.

Thanks

 

[oaw]

I suggest that you find an accountant for your self,
tell the details to your accountant and then he will let you know.
I heard that when you file the tax return for the first time, you need to declare your international wealth.
lets say you declare that your house in Algeria is of 100,000 then after 3 years you plan to sell your house for 120,000 then they will TAX you for Capital gain of 20,000. as your profit or gain is 20,000 only.
you wont be required to pay for rest of 100,000.


but I am not expert, your TAX accountant can tell better

 

[redbulldz]

Definitely ! That's the first step for me next week. I'm actually spending on vacation before joining my province.
Thanks for your support

 

[jc94]

I did not have to declare overall international funds when I filed taxes for the first time in 2014, only the amount of interest made on those accounts.
I also did not pay tax on the $5k or so I bought in in cash.

And my taxes were filed with the support of a well known (and not cheap) international tax company.

But yes, if you sell your house while in Canada... the profit made there will be taxed.

[Edit] I am talking about money in bank accounts; if you have money tied up in say property (or shares) that is another matter!

 

[redbulldz]

Ok that's very clear now, thanks to you all.
In summary :

1- If you bring cash later after your PR confirmation you don't pay taxes
2- Your foreign accounts/savings are not taxed, only profits are concerned
3- During your 1st tax declaration, you have to show your international wealth. You will be taxed only on the profit made on this wealth

 

[jc94]

Just one thing to add, if you are bringing > $10,000 CAD (which includes $5,000 CAD and $5,000 in USA, ie: U$3800 for example) in cash or similar like travelers cheques over the border you MUST declare that to the customs guys.

It's not an issue if there is a good reason; but because of fears about what it could be used for, you do need to declare it and not doing so can incur major penalties.

 

[redbulldz]

Sure i will. Actually it's less than that anyway so no risk on that side. Thanks