Taxation on foreign earnings
Jun 2nd 2004, 2:45 am
#1
Account Closed
Thread Starter
Joined: Jul 2003
Posts: 800
Taxation on foreign earnings
Hi all
I've just been down to my local HSBC bank to give them my new mailing address in Canada, currently I live and work in Hong Kong.
The guy said he would process the request but they may close down my account as Canada has a policy of taxing foreign earnings.
Well, I don't really consider these as earnings, they're just savings from my time in HK.
I've got three questions.
1. If I manage to keep my HK account going, am I going to get taxed again, this time by the Canadians - even though the money is still here in HK. That can't be right can it?
2. If the account gets closed, I'll probably have to bring the money into Canada. Am I going to get taxed bringing it in? That can't be right either!!
3. Is it time for me to get an offshore account?
Thanks in advance for any advice you guys can offer.
Sean
I've just been down to my local HSBC bank to give them my new mailing address in Canada, currently I live and work in Hong Kong.
The guy said he would process the request but they may close down my account as Canada has a policy of taxing foreign earnings.
Well, I don't really consider these as earnings, they're just savings from my time in HK.
I've got three questions.
1. If I manage to keep my HK account going, am I going to get taxed again, this time by the Canadians - even though the money is still here in HK. That can't be right can it?
2. If the account gets closed, I'll probably have to bring the money into Canada. Am I going to get taxed bringing it in? That can't be right either!!
3. Is it time for me to get an offshore account?
Thanks in advance for any advice you guys can offer.
Sean
Jun 2nd 2004, 4:16 am
#2
Just Joined
Joined: May 2004
Location: Portland, Oregon -- hoping for Vancouver...
Posts: 28
Re: Taxation on foreign earnings
Originally posted by Sean Boxer
I've got three questions.
1. If I manage to keep my HK account going, am I going to get taxed again, this time by the Canadians - even though the money is still here in HK. That can't be right can it?
2. If the account gets closed, I'll probably have to bring the money into Canada. Am I going to get taxed bringing it in? That can't be right either!!
3. Is it time for me to get an offshore account?
Sean
I've got three questions.
1. If I manage to keep my HK account going, am I going to get taxed again, this time by the Canadians - even though the money is still here in HK. That can't be right can it?
2. If the account gets closed, I'll probably have to bring the money into Canada. Am I going to get taxed bringing it in? That can't be right either!!
3. Is it time for me to get an offshore account?
Sean
1. What they are likely talking about is taxing the interest (or other earnings) that accrue to the account. If you are a "resident" of Canada for tax purposes, then you would be taxed on your worldwide income, including the interest on this account. However, they would also offer you a tax credit of the lesser of the Canadian tax or the HK tax on this interest income. So you should be able to avoid double taxation.
1a. The bank may have some non-tax policy about leaving an account open and residing somewhere else. Or something to do with HK taxes? I don't know about that one.
2. There is no tax for simply bringing your own money into the country. There might be income tax on the interest it earns afterward -- but no import taxes. If you are carrying the money with you (in any form) when you enter the country, you must declare it if it amounts to over C$10,000. There will be no tax on this amount, though.
3. No, keep it simple. Opening an account somewhere where you do not have ties WILL put up a red flag.
Bryan
Jun 2nd 2004, 5:39 am
#3
Account Closed
Thread Starter
Joined: Jul 2003
Posts: 800
Re: Taxation on foreign earnings
Originally posted by Bryan Kellar
Hi Sean.
1. What they are likely talking about is taxing the interest (or other earnings) that accrue to the account. If you are a "resident" of Canada for tax purposes, then you would be taxed on your worldwide income, including the interest on this account. However, they would also offer you a tax credit of the lesser of the Canadian tax or the HK tax on this interest income. So you should be able to avoid double taxation.
1a. The bank may have some non-tax policy about leaving an account open and residing somewhere else. Or something to do with HK taxes? I don't know about that one.
2. There is no tax for simply bringing your own money into the country. There might be income tax on the interest it earns afterward -- but no import taxes. If you are carrying the money with you (in any form) when you enter the country, you must declare it if it amounts to over C$10,000. There will be no tax on this amount, though.
3. No, keep it simple. Opening an account somewhere where you do not have ties WILL put up a red flag.
Bryan
Hi Sean.
1. What they are likely talking about is taxing the interest (or other earnings) that accrue to the account. If you are a "resident" of Canada for tax purposes, then you would be taxed on your worldwide income, including the interest on this account. However, they would also offer you a tax credit of the lesser of the Canadian tax or the HK tax on this interest income. So you should be able to avoid double taxation.
1a. The bank may have some non-tax policy about leaving an account open and residing somewhere else. Or something to do with HK taxes? I don't know about that one.
2. There is no tax for simply bringing your own money into the country. There might be income tax on the interest it earns afterward -- but no import taxes. If you are carrying the money with you (in any form) when you enter the country, you must declare it if it amounts to over C$10,000. There will be no tax on this amount, though.
3. No, keep it simple. Opening an account somewhere where you do not have ties WILL put up a red flag.
Bryan
I've double checked with the bank and they have confirmed there will be no tax on my savings, just future HK earnings and, as you said, any interest my savings may earn.
They also told me that I will have to sell my shares, that I bought through the bank, when I move to Canada. This is annoying but not a huge deal for me as I don't own that many.
Once again, many thanks for your help.
Sean
