Tax Question

Old Aug 23rd 2004, 3:55 am
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Default Tax Question

I'm going to open a bank account in Canada and transfer my savings when I land. Is the money I transfer subject to taxes if I only put it in a checking account without gaining any intrest on it? If it is subject to taxes, how much is it? I hope I'm not losing 30% of my savings to taxes :scared:
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Old Aug 23rd 2004, 3:58 am
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Default Re: Tax Question

Funds you bring in with you are not taxed. Any income earned from these funds after they are brought it would be subject to tax.
Originally Posted by MJ23
I'm going to open a bank account in Canada and transfer my savings when I land. Is the money I transfer subject to taxes if I only put it in a checking account without gaining any intrest on it? If it is subject to taxes, how much is it? I hope I'm not losing 30% of my savings to taxes :scared:
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Old Aug 23rd 2004, 3:59 am
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Default Re: Tax Question

Originally Posted by Jim Humphries
Funds you bring in with you are not taxed. Any income earned from these funds after they are brought it would be subject to tax.
Thank you sir!
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Old Aug 24th 2004, 3:14 am
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Default Re: Tax Question

Originally Posted by MJ23
I'm going to open a bank account in Canada and transfer my savings when I land. Is the money I transfer subject to taxes if I only put it in a checking account without gaining any intrest on it? If it is subject to taxes, how much is it? I hope I'm not losing 30% of my savings to taxes :scared:
I hope you’re not putting all you savings into a checking account simply to avoid paying income taxes. That said, the interest rates are so low, you might as well (I’m paying 4.9%... on my credit card!)

Note that you have to declare all income for the current calender year when you do your income declaration next spring. That includes income earned from foreign sources! You can generally deduct any tax you already paid. The province that will be getting its cut is the province you live in on December 31.

Note that in some circumstances, you will have to pay tax on financial instruments or other assets (including cash) that you take out of Canada. Many countries have similar restrictions (check with your current country!). If you enter Canada with your pockets filled with cash or other financial instruments , note that you have to declare the amount at the border when it is Can$10,000 or more. It is a serious crime not to do so (the amount can be confiscated). They are even more strict about that in the USA (it is US$10,000 over there). So be careful if you enter Canada via Atlanta or Los Angeles (Aircanada.ca now offers direct flights to most countries to take advantage of people wanting to avoid the USA.)

You also have to explain the source of the money when you deposit Can$10,000 into your bank account (the bank couldn’t care less, they are forced to do so by the government). This is easily avoided by depositing (or transferring) less than Can$10,000 at one time.

As well, don’t forget that Canada has a relatively high (unless you are European) goods and services tax. Hence, the governments will get between 7 and 17% of whatever you spend.

Check out my web site for more info on the subject:

www.geocities.com/merdealorsen/immigration.html

Sam
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Old Aug 25th 2004, 3:05 am
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Default Re: Tax Question

Originally Posted by merdealorsen
I hope you’re not putting all you savings into a checking account simply to avoid paying income taxes. That said, the interest rates are so low, you might as well (I’m paying 4.9%... on my credit card!)

Note that you have to declare all income for the current calender year when you do your income declaration next spring. That includes income earned from foreign sources! You can generally deduct any tax you already paid. The province that will be getting its cut is the province you live in on December 31.

Note that in some circumstances, you will have to pay tax on financial instruments or other assets (including cash) that you take out of Canada. Many countries have similar restrictions (check with your current country!). If you enter Canada with your pockets filled with cash or other financial instruments , note that you have to declare the amount at the border when it is Can$10,000 or more. It is a serious crime not to do so (the amount can be confiscated). They are even more strict about that in the USA (it is US$10,000 over there). So be careful if you enter Canada via Atlanta or Los Angeles (Aircanada.ca now offers direct flights to most countries to take advantage of people wanting to avoid the USA.)

You also have to explain the source of the money when you deposit Can$10,000 into your bank account (the bank couldn’t care less, they are forced to do so by the government). This is easily avoided by depositing (or transferring) less than Can$10,000 at one time.

As well, don’t forget that Canada has a relatively high (unless you are European) goods and services tax. Hence, the governments will get between 7 and 17% of whatever you spend.

Check out my web site for more info on the subject:

www.geocities.com/merdealorsen/immigration.html

Sam

Thanks for the information!
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