Eh, Canadians, a question about taxes!
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teachingagain1945
- Posts: 40
- Joined: Fri Jun 06, 2014 12:41 am
Re: Eh, Canadians, a question about taxes!
I remember reading 25 years ago about transfers of money $10,000 CDN and over, even domestic transfers, getting a small red flag and possibly looked into by RC. It was supposedly because of concerns it could be money from criminal activity.
Re: Eh, Canadians, a question about taxes!
Yes, $10,000 is the most you can bring into Canada without declaring it. It is to prevent money laundering. However, as long as it is declared it is not a problem. It is automatically 'declared' when you do a bank transfer. You can bring in as much as you want, it just needs to be declared.
However, let's be clear, it may or may not bring up a small red flag, but that is a long way from being declared resident and being hit with associated tax implications. As long as you have followed the rules of non-residency it won't be a problem. If you think you haven't done enough, then maybe you need to do something about that.
If you are planning on investing and plan on living overseas for an extended period, I suggest you read Andrew Hallam's blog / forum. There is a section on investing for expat Canadians. Also, read his second book. It also has a section for expat Canadians.
However, let's be clear, it may or may not bring up a small red flag, but that is a long way from being declared resident and being hit with associated tax implications. As long as you have followed the rules of non-residency it won't be a problem. If you think you haven't done enough, then maybe you need to do something about that.
If you are planning on investing and plan on living overseas for an extended period, I suggest you read Andrew Hallam's blog / forum. There is a section on investing for expat Canadians. Also, read his second book. It also has a section for expat Canadians.
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chilagringa
- Posts: 335
- Joined: Sun Apr 24, 2011 7:19 pm
Re: Eh, Canadians, a question about taxes!
I sure hope having a bank account in Canada doesn't make me a tax resident. No way am I keeping all my money in a bank account in my new country! I've heard too many first-hand horror stories.
I am planning to cut all "major" ties - no dependants, spouse, home
I will have a couple of secondary ties: a passport, a Canadian bank account (with investments), and a credit card. I will let my health insurance and driver's license lapse.
I hope that this is enough! I'm surprised that you all say not to call the RC...
I am planning to cut all "major" ties - no dependants, spouse, home
I will have a couple of secondary ties: a passport, a Canadian bank account (with investments), and a credit card. I will let my health insurance and driver's license lapse.
I hope that this is enough! I'm surprised that you all say not to call the RC...
Last edited by chilagringa on Tue Apr 28, 2015 1:41 am, edited 1 time in total.
Discussion
Thats the issue at large in regards to RC, I use to believe that Americans had it the worse, but in CAN its an all or nothing approach. You either sever all ties short of your passport and renouncing your citizenship, or you take your chances. RC can get very aggressive in pursuing and collecting what it believes you owe. Is it too much for Canadians to get a standing declaration of guidance that these are the requirements for establishing non residency, and that this list of X actions would be considered counter to establishing an individual as non resident.
Its not the requirements that is an issue and the cause for concern, its the confusion and ambiguity regarding the definitions and criterion.
Its not the requirements that is an issue and the cause for concern, its the confusion and ambiguity regarding the definitions and criterion.
Re: Eh, Canadians, a question about taxes!
I was tired of wondering about this question and all the 'expert' answers I had gotten from other teachers, so I decided to call CRA myself. In order to ensure I had the right answer, I contacted three different international tax agents with CRA in a week. They all told me the same thing: it is a case by case basis. But if you don't have kids, a wife/husband living in Canada and a bunch of Canadian properties (you can have RRSPs and have your money with a Brokerage, but not contribute to Registered/Tax Free Savings Securities), you probably won't owe anything. In fact, CRA was very helpful, with one of the agents telling me stories of his friends who went to China to teach years ago and have decided to stay there. If you want the answers, call CRA and ask them yourself.
Re: Eh, Canadians, a question about taxes!
Thanks for the witty insights everyone.
Re: Eh, Canadians, a question about taxes!
One last question for you helpful ones (or perhaps this is a q for the CRA)...
As you know, I am a Canadian citizen, but I will be working at a school that pays an option of USD, or Rmb (Chinese currency). If I decide to sever ties with Canada, would it be best to request my salary, or perhaps even "argue" a set salary in rmb at my current school on my contract? I'm not even sure if this is an option, because I'm paid in USD at the moment...
My girlfriend is pushing me to put my money into rmb, and invest it into we chat wallet (are any of familiar with this program? Its basically an "at your finger tips" investment fund, which pays high interest. Albeit it is not the safest investment). Another option is that I set up a bank in China, and perhaps open a savings account in the mainland.
What are your thoughts people?
Thanks in advance!
As you know, I am a Canadian citizen, but I will be working at a school that pays an option of USD, or Rmb (Chinese currency). If I decide to sever ties with Canada, would it be best to request my salary, or perhaps even "argue" a set salary in rmb at my current school on my contract? I'm not even sure if this is an option, because I'm paid in USD at the moment...
My girlfriend is pushing me to put my money into rmb, and invest it into we chat wallet (are any of familiar with this program? Its basically an "at your finger tips" investment fund, which pays high interest. Albeit it is not the safest investment). Another option is that I set up a bank in China, and perhaps open a savings account in the mainland.
What are your thoughts people?
Thanks in advance!
Re: Eh, Canadians, a question about taxes!
You need to find an investment vehicle that will allow you to get your money out of China. Simply accumulating it in an RMB account would be silly and unproductive in the long run. I am sure if you search the forum other Canadians have had the same question and probably received some very good advice.
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shadowjack
- Posts: 2140
- Joined: Sat Oct 06, 2012 9:49 am
Re: Eh, Canadians, a question about taxes!
Investing your money also depends on where you are. The country I am in, you can get minimum 6% on a US dollar term investment, and 8% if you deposit 100K or more for the term. Not going to do that back home! Fairly easy to get $$ out of the country too (no, it is NOT China!)
Re: Eh, Canadians, a question about taxes!
Thanks for the help everyone!
If I declare non residency in Canada, will my teaching certifications also be removed? I have BC and Alberta. My Alberta cert is NOT permanent.
If I declare non residency in Canada, will my teaching certifications also be removed? I have BC and Alberta. My Alberta cert is NOT permanent.
Response
@whoamI?
No your Canadian license will not be revoked, neither providence requires residency to maintain certification (BC even allows not citizens to obtain certification).
It is a relatively simple process of opening a Chinese passbook account. You find out the hours the foreign transactions desk/counter is available and go down with your passport and currency. You can open both RMB accounts and foreign currency (USD) accounts. You will get a passbook, and an ATm card.
Assuming you are not looking for investment advise (and your GF is naive, if you want high risk high return investment options, you have more options as a day trader using an exchange then many Chinese would have).
Always take the local currency. Even if your school offers you the option of being paid in USD, unless your contract is written in USD, than all your IS is doing is exchanging local currency (RMB) at whatever rate they can get from their financial institution, they then remit the salary disbursement to you. You then have to convert it again from USD into local currency when you need to pay for things locally. This is a net result of two conversions and the associated exchange loss and fees, you are better getting your salary in local currency and only having to exchange it one if needed to.
No your Canadian license will not be revoked, neither providence requires residency to maintain certification (BC even allows not citizens to obtain certification).
It is a relatively simple process of opening a Chinese passbook account. You find out the hours the foreign transactions desk/counter is available and go down with your passport and currency. You can open both RMB accounts and foreign currency (USD) accounts. You will get a passbook, and an ATm card.
Assuming you are not looking for investment advise (and your GF is naive, if you want high risk high return investment options, you have more options as a day trader using an exchange then many Chinese would have).
Always take the local currency. Even if your school offers you the option of being paid in USD, unless your contract is written in USD, than all your IS is doing is exchanging local currency (RMB) at whatever rate they can get from their financial institution, they then remit the salary disbursement to you. You then have to convert it again from USD into local currency when you need to pay for things locally. This is a net result of two conversions and the associated exchange loss and fees, you are better getting your salary in local currency and only having to exchange it one if needed to.
Re: Eh, Canadians, a question about taxes!
You might want to check out the foreign currency account info, I know our foreign accounts were all closed in the past couple of years and we are restricted to an RMB account only.
If you have the option I would take part of my salary in USD and part in RMB after you figure out your local expenses. I'm not convinced the RMB can maintain it's strength and being paid solely in RMB puts you at risk of losing out.
As for your certification, you need to called the licensing bureau and find out what the impact of moving out of Alberta will have on your temporary license. I know a permanent license can be maintained in BC without keeping your residency but I would question whether a temp one could.
If you have the option I would take part of my salary in USD and part in RMB after you figure out your local expenses. I'm not convinced the RMB can maintain it's strength and being paid solely in RMB puts you at risk of losing out.
As for your certification, you need to called the licensing bureau and find out what the impact of moving out of Alberta will have on your temporary license. I know a permanent license can be maintained in BC without keeping your residency but I would question whether a temp one could.
Re: Eh, Canadians, a question about taxes!
"I sure hope having a bank account in Canada doesn't make me a tax resident. No way am I keeping all my money in a bank account in my new country! I've heard too many first-hand horror stories.
I am planning to cut all "major" ties - no dependants, spouse, home
I will have a couple of secondary ties: a passport, a Canadian bank account (with investments), and a credit card. I will let my health insurance and driver's license lapse.
I hope that this is enough! I'm surprised that you all say not to call the RC..."
Sounds fine. We are in China and try to move savings out of country as soon as possible. The rate is currently excellent. It's a bit of a pain transferring money overseas, but it's quite doable. You need to take your contract, payslips, monthly tax receipts and passport. It costs about $35 and takes a couple of days to reach it's destination.
Here's another option for smaller amounts; open a second bank account with another ATM card (make sure it's Union Pay) and have the bank set it up so you can transfer money between the two using the ATM machines. Once this is done, send the second card home. On payday transfer the money you want to send home to the second account and have someone draw it out at home. You can take it out in $400 lots, but there seems to be no restriction on how many times you can do it in a day.
On the subject of brokers, investing in a brokerage in Canada is a bad idea if you are going to be overseas long term, as you are opening yourself up to capital gains tax when you sell. You can buy the same funds through, through TD International (yes, Toronto Dominion) in Luxembourg, for example, however, Luxembourg has no capital gains tax. You're still buying off the Toronto Stock Exchange, but the company is domiciled in a country with no capital gains. Perfectly legitimate and safe. http://int.tddirectinvesting.com/
I am planning to cut all "major" ties - no dependants, spouse, home
I will have a couple of secondary ties: a passport, a Canadian bank account (with investments), and a credit card. I will let my health insurance and driver's license lapse.
I hope that this is enough! I'm surprised that you all say not to call the RC..."
Sounds fine. We are in China and try to move savings out of country as soon as possible. The rate is currently excellent. It's a bit of a pain transferring money overseas, but it's quite doable. You need to take your contract, payslips, monthly tax receipts and passport. It costs about $35 and takes a couple of days to reach it's destination.
Here's another option for smaller amounts; open a second bank account with another ATM card (make sure it's Union Pay) and have the bank set it up so you can transfer money between the two using the ATM machines. Once this is done, send the second card home. On payday transfer the money you want to send home to the second account and have someone draw it out at home. You can take it out in $400 lots, but there seems to be no restriction on how many times you can do it in a day.
On the subject of brokers, investing in a brokerage in Canada is a bad idea if you are going to be overseas long term, as you are opening yourself up to capital gains tax when you sell. You can buy the same funds through, through TD International (yes, Toronto Dominion) in Luxembourg, for example, however, Luxembourg has no capital gains tax. You're still buying off the Toronto Stock Exchange, but the company is domiciled in a country with no capital gains. Perfectly legitimate and safe. http://int.tddirectinvesting.com/
Last edited by IAMBOG on Fri May 01, 2015 8:32 pm, edited 2 times in total.
Re: Eh, Canadians, a question about taxes!
PSYGUY: "Thats the issue at large in regards to RC, I use to believe that Americans had it the worse, but in CAN its an all or nothing approach. You either sever all ties short of your passport and renouncing your citizenship, or you take your chances."
This is not true and is simply adding to the confusion. It may not be black and white, but it's not a crapshoot either.
I just spent four years working at a Canadian offshore school. I am not aware of anyone having to pay back tax after they returned. The process seemed quite straightforward. I will add though, the majority were under 30, single with limited ties. Most had bank accounts, passports, credit cards and driver's licences from Canada. More than a few had student loan payments.
This is not true and is simply adding to the confusion. It may not be black and white, but it's not a crapshoot either.
I just spent four years working at a Canadian offshore school. I am not aware of anyone having to pay back tax after they returned. The process seemed quite straightforward. I will add though, the majority were under 30, single with limited ties. Most had bank accounts, passports, credit cards and driver's licences from Canada. More than a few had student loan payments.
Reply
@IAMBOG
It is true, thats the operational definition of a crapshoot. Anytime an you qualify explanation with "decided on a case by case basis" in an artificial system thats exactly what a crapshoot is. Its confusing because RC chooses to make it confusing they could just as easily clarify, remove the ambiguity and be transparent if they had the will to do so.
It is true, thats the operational definition of a crapshoot. Anytime an you qualify explanation with "decided on a case by case basis" in an artificial system thats exactly what a crapshoot is. Its confusing because RC chooses to make it confusing they could just as easily clarify, remove the ambiguity and be transparent if they had the will to do so.