This section addresses some of the key concerns Canadians face when returning to Canada. They are serious issues and the choices made can have significant financial repercussions for the short and long term. As a result, research and careful consideration is highly recommended in the planning of your finances, taxes, and banking arrangements. Key concerns:
Let's clear up the most pressing and concerning questions Canadians have when returning to Canada:
"Do I pay taxes on my money (savings, investments, etc.) when I return to Canada"
The short answer: No.
The longer answer: If you meet the following conditions, you may send to Canada, or bring with you, as much money as you wish and it will not be subject to taxes in Canada.
In summary, if you meet the general criteria noted above, you will not be taxed on funds you bring into Canada.
One typical concern of returning Canadians is the "CDN $10,000" limit that is clearly noted on all airline information and Canadian government web sites.
Please note that this CDN $10,000 limit is for having to report what you are bringing into Canada. Anything over CDN $10,000 in cash, gold coins/bullion, or other financial currencies or liquid assets must be reported at the time you enter Canada. You do not need to pay tax on amounts over CDN $10,000, but you must report how much you are bringing if you are over that limit. This rule is for currency controls and money laundering reasons, not specifically for tax reasons.
One of my clients brought CDN $350,000 in gold bars with them on the plane to Canada. While this is completely fine legally and not taxed, I do not recommend bringing these amounts with you, for security reasons. There are money, bullion, and jewelry shipping companies which specialize in securely shipping such items. Please use one of these services if you are bringing large amounts of physical liquid assets. The risk of theft is too high! "But nobody will know. We will keep it a secret and hide it in our clothes!" No, just no. Please don't bring high value amounts of cash, gold, jewelry, or other liquid or easily liquidated items with you. Ship them securely.
One very typical concern Canadians in the U.S., UK, Australia, Hong Kong, and UAE have is the selling of their overseas property when they return. The cleanest and easiest situation is to have your overseas real estate sold before you return and the funds from the sale sitting in your bank account in that country. Simple. Then you send this money to Canada when you come back and it is clearly yours at the time of your return.
But what if you haven't sold it yet? Or you want to keep it for a while before selling, due to market conditions at the time or as an investment?
The key in this case is to have a solid third-party valuation done of your overseas property and all your investments at the time your return. This becomes your benchmark valuation point for when you start paying taxes in Canada. Any capital gains, rental income, interest income, dividends, or profits you earn from your overseas assets become taxable starting from the day you return. You pay taxes on all forms of income earned from the day you return to Canada onwards. Having a clear valuation of your overseas assets done very close to, or on the day you return to Canada, will be very useful later.
Bringing your vehicle into Canada from the U.S. may result in taxes. Please see the official riv.ca web site for full details on importing your American car into Canada when you return. Note: You may not bring in vehicles from countries other than the U.S. There are very special exceptions (ancient collector vehicles, for example), but normal vehicles may only be imported from the USA.
Canada has tax treaties with many countries. If you pay taxes in another country you do not pay taxes in Canada, or get a tax credit on the taxes you pay abroad. If there is a big difference between the taxes you pay abroad and the amounts you would have to pay in Canada, have care in maintaining your non-resident status in Canada so as to minimize your tax implications here.
List of countries Canada has tax treaties with: Tax Treaties in Effect .
Before they go overseas, or during their time living abroad, many Canadians wonder if they should seek a CRA declaration stating they are non-resident (Form NR73). I do not normally recommend doing so. Why not? Well, for one thing, you are now opening a "case file" in their system where a file does not need to be opened. If you cut all reasonable residential ties to Canada, and have proof of living and working outside of Canada, you are non-resident. Why bring CRA attention to your tax situation unnecessarily? While I am not claiming anything bad will happen by doing so, does it make intuitive sense that no "case file" is better than having one? I hope so.
Here is an analogy to help make clear why CRA "approval" of your non-resident status is perhaps not necessary nor desirable:
The CRA is a hungry lion. A real lion is biologically designed to hunt and consume food when it is hungry. Similarly, the CRA is designed to capture taxes. And as all governments in the world are hungry for tax revenues, the CRA is hungry for any tax revenue it can find.
You are a gazelle.
When you ask the CRA to not tax you, you are in effect a gazelle going up to a hungry lion, sitting down in front of it, and asking it: "Please Mrs. Lion (female lions do all the hard work), I would like you to not eat me. In fact, I would like you to declare to the whole savanna that you agree not to eat me."
Well, the lion is not designed to "not eat you". It is not thinking about "not eating you". It is hungry and thinking about eating you!
Similarly, asking the CRA to do something that is literally against its mission, purpose, and DNA may get you what you want, but it will not be happy doing so.
In summary, can you imagine how a hungry female lion feels having to "not eat you" and watch you walking away? At the very least, it might feel mildly annoyed. At worst, seriously annoyed. If it ever sees you on the savanna again, it will remember you as the one who got away and irritated it with a silly request to not eat you, when you really would have tasted rather yummy and filled the hole in its stomach. Is that what a gazelle wants a lion to feel about it?
Is that what you want the CRA to feel about you?
For most Canadians returning from the U.S., engaging the support of a professional cross-border tax accountant makes sense, particularly for the first year, when almost all returning Canadians have to file both countries' tax returns. If you are returning from other countries, having a tax accountant is usually not needed, unless you have very complicated personal investments.
Here are some areas that can cause you serious complication and potentially negative financial implications, for which a professional tax accountant who specializes in both Canadian and U.S. taxes can help:
I have met or spoke with several tax accountants and tax lawyers who I can recommend and for who I have received feedback from happy clients I have referred. Please not that I receive no commission or other benefit from these recommendations, so you can trust that these are good people to work with.
I went though a lot of bad, expensive, and incompetent accountants before finding Allan's firm. I hope others can benefit from my quest. His firm has been proactive and reasonably priced for years. - T. Gorender, June 2018.
I highly recommend Mel Dam from Dam Income Tax in Oshawa, Ontario. (Yes, that's really the business' name). I've been using him for years including before/during/after my two periods of living abroad." - Barbara Eshpeter-Jenkins
"Firm of Clark & Horner. Excellent work with routine and complex matters and reasonable rates." - Dean MacKey
It used to be the case that having a bank account and doing banking in Canada could trigger you being considered resident here, with tax implications. This is no longer as serious a concern. Financial assets move around the world daily. Simply having a bank account or other financial investments in Canada (such as an RRSP) will not impact your tax status.
What about a credit card? I do not suggest having a Canadian credit card. This is because a credit card, if used during your vacations here and when are overseas, starts to look like you have more than an "arms-length" tie to Canada. In other words, using a Canadian credit card starts to make you look like a resident of Canada. Not recommended.
Can you open a bank account from abroad?
If you do not have a bank account in Canada and wish to open one while you are physically abroad, you can now do so more easily. The Royal Bank of Canada (RBC), for example, now allows you to open a bank account before you come to Canada. (The process of setting up an account with RBC can only be initiated through their web site right now and is noted below.)
Some of my clients are reporting that other Canadian banks and trust companies do not allow you to set up an account unless you are physically present in Canada. One client, for example, got nowhere with ScotiaBank, who told her that they required physical presence at a branch in Canada to set up an account. I phoned CIBC in August of 2018 and they were explicit that they don't have the ability to open an account for a Canadian citizen living abroad, even though I made really clear I was sending clients to RBC! "Hopefully in the future we will have this option" was what I was told.
That said, some returning Canadians are successful in opening accounts at banks or trust companies other than RBC! The lesson: Be sure to be persistent when calling a Canadian bank from abroad, as some representatives at bank call centres may not understand that you are able to access "newcomer" packages or simply a new account because you are a Canadian citizen.
RBC's process for opening new bank accounts from outside Canada
Note: I get no commission or other benefit from RBC. They are simply the example I have heard of working for returning Canadians, and have proven myself that it works, which is why I share this information.
Here are the steps:
Opening a bank account in Canada while visiting, with a foreign addressYes! As long as you have appropriate proof of identification, you can open a bank account in Canada while visiting, using a foreign address. An experience shared with me:
I was able to open a joint account with my husband (US citizen) using our current US address in late 2017. Granted, we did have to open the account in person, but we just arranged this when we were on holiday in Ottawa. There was absolutely no hesitation at all from TD Canada Trust and they knew we didn't have a Canadian address upfront. My impression was they didn't care, as long as we had the appropriate identification. I have even changed my US address, and again, no issues, I just had to call in the new address.
Please share with me your ideas, considerations, and experiences relating to taxes, accounting, and banking. I will post them here as help for others. Along with a credit to you will be a big "THANK YOU!" on behalf of the many people you will be helping!
Latest update to this page: October 2018.