Non-Resident + Taxes

[Fencesitter]

Hi all,

Just a quick question: When I return to Canada, I will be transferring a large amount of money to my recently opened savings account with RBC. As far as I know, I will not have to pay tax. Is this correct? Is there a limit? Let's say, for example, that I was planning to transfer $50,000. Would the Canadian government tax any of it? Do I need some kind of proof that the money is from a source outside of Canada? I have been a non-resident since 2001.

Or should I setup my wife's account when we arrive and put all the money into her account?

Thanks,
FS

 

[lunas]

This is an excellent question. I hope somebody replies with an answer.

 

[steaky]

No tax and unlimited. I transfer money between my accounts in Hong Kong and Canada all the time. The bank will do all the reporting for me. I don't need to worry.

 

[truesmile]

Hey FS,

The Canadian bank involved with have to:
" . . . report international electronic funds transfers of $10,000 or more that you send or receive. These include the transmission of instructions for a transfer of funds made at the request of a client through any electronic, magnetic or optical device, telephone instrument or computer."

The source of that excerpt can be found here:
http://www.fintrac-canafe.gc.ca/re-ed/fin-eng.asp#s113

Your situation is easily explained (if anyone asks). You won't have to pay tax on it, it's your money to begin with. I found all this out "after" transferring a large sum of $$ in increments of LESS than 10K. HA!!

 

[Fencesitter]

Thanks for the replies.

So there is no need to provide proof of where the money came from? To avoid any scrutiny, should I transfer amounts less than $10,000?

Thanks,
FS

 

[truesmile]

Based on what I found 'after the fact' in my case, and what is corroborated by another forumer's experience, I don't think it's necessary.

 

[tuyen]

Hi all,

Just a quick question: When I return to Canada, I will be transferring a large amount of money to my recently opened savings account with RBC. As far as I know, I will not have to pay tax. Is this correct? Is there a limit? Let's say, for example, that I was planning to transfer $50,000. Would the Canadian government tax any of it? Do I need some kind of proof that the money is from a source outside of Canada? I have been a non-resident since 2001.

Or should I setup my wife's account when we arrive and put all the money into her account?

Thanks,
FS

Taxes are paid on income you earn while being a resident of the country in question.
If the money you're transferring was earned OUTSIDE of Canada while you were not residing in Canada, there's no reason why you would be required to pay Canadian taxes on it. The assumption is that your money was already taxed by another government where the money was earned. You can transfer it all in one shot - there's no reason to do multiple transfers. The only thing you'll be doing with multiple transfers is raising red flags and making people suspicious. If the money was earned legally while you were clearly not residing in Canada, you have absolutely nothing to worry about. The only taxes you will pay will be on any interest or dividends earned on that money during the next fiscal year AFTER you've returned to Canada.

Using your example of $50,000, if you return to Canada on January 1, 2013 and put the money into an interest-earning account which yields you $2000 net interest during 2013, then your 2013 income tax filing will require you to pay taxes on the $2000 of earned interest (plus whatever additional earnings you will have during the year).

 

[Fencesitter]

Thanks.

So I should definitely keep my Chinese tax assessments and get them translated and notarized, right? I think it's a good idea to keep all income related documents, both official and from my employer, just in case I am asked to prove where the money was earned. Luckily I have all those documents.

Does it work the same way with gold and other precious metals?

Thanks,
FS

 

[waikiki]

No taxes, why should they tax you? You already paid taxes in HongKong. No worries. THe bank will just ask you, if this is your savings, that's it, but of course, just keep all the relevant tax documents you have, just in case. And you do not to stay under 10000$.

 

[tuyen]

So I should definitely keep my Chinese tax assessments and get them translated and notarized, right? I think it's a good idea to keep all income related documents, both official and from my employer, just in case I am asked to prove where the money was earned. Luckily I have all those documents.

You should keep all your documents, but I wouldn't spend time or money notarizing and translating them unless somebody asks you to do it, and most likely they won't.

Does it work the same way with gold and other precious metals?

It's actually even less of a problem with gold and precious metals, because those are assets that you purchased.
It would be like coming to Canada with furniture - it's your personal property and is not subject to taxes.