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Korean Job Discussion Forums
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jondepoer
Joined: 02 May 2010
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 Posted: Fri Nov 04, 2011 7:59 am Post subject: Canadians: I'm sending money home. Let's talk tax. |
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Hello Canadian teachers,
Well, the exchange rates are finally looking half-decent again. I am looking to send home a fairly big chunk of change, representing a couple years savings of my wife and I. I want to get it home as quickly and painlessly as possible, and into whatever can make me the most interest in a year.
How much can I send home without attracting the attention of the CRA? I'm looking for personal experiences here, since there doesn't seem to be any hard-and-fast rule. If, for argument sake, $30,000 appeared in my savings account one day, would there be any repercussions tax-wise?
I know this is a common topic of discussion, but laws and circumstances change all the time, so I'm looking for some up to date information. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Fri Nov 04, 2011 1:15 pm Post subject: |
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| I've always send home around $8000-$9000 every year via bank wire transfer. Any extra, exchange at airport, take home as cash during your vacation. Has worked well for me. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Fri Nov 04, 2011 3:49 pm Post subject: Re: Canadians: I'm sending money home. Let's talk tax. |
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| jondepoer wrote: |
Hello Canadian teachers,
Well, the exchange rates are finally looking half-decent again. I am looking to send home a fairly big chunk of change, representing a couple years savings of my wife and I. I want to get it home as quickly and painlessly as possible, and into whatever can make me the most interest in a year.
How much can I send home without attracting the attention of the CRA? I'm looking for personal experiences here, since there doesn't seem to be any hard-and-fast rule. If, for argument sake, $30,000 appeared in my savings account one day, would there be any repercussions tax-wise?
I know this is a common topic of discussion, but laws and circumstances change all the time, so I'm looking for some up to date information. |
Non issue. Unless there is some documentation to show otherwise the CRA will assume it is post-tax income from somewhere.
Bank wires are done all the time by people re-locating from one country to another or it may be treated as an off-shore investment coming into Canada.
Do be aware that INTEREST EARNED on the deposits may be taxed at the non-resident rate (if you have declared yourself to be non-resident for tax purposes).
. |
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hack
Joined: 24 Jan 2003
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| Posted: Fri Nov 04, 2011 4:08 pm Post subject: Re: Canadians: I'm sending money home. Let's talk tax. |
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| jondepoer wrote: |
Hello Canadian teachers,
. If, for argument sake, $30,000 appeared in my savings account one day, would there be any repercussions tax-wise?
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That really depends on your bank. Banks use software to monitor unusual activity in accounts. People sell cars, homes, stocks etc. every day in these amounts and much higher so often a deposit in this amount will not raise a flag. However, unless you have a large balance or have a history of making deposits in this amount, a report would get triggered. This is where it gets slippery. It will initially get looked at by a person in a lower position who will usually forward it to someone senior to them depending on their level of experience. If that next level is intrigued, they will examine your account history and either let it go or forward it on to an investigative team. This is the level that could forward it to the "authorities" and there it can go several directions including law enforcement or CRA. Obviously you have nothing to fear from the law because you came by the money legally which they probably wouldn't even ask you to prove for that amount but if CRA thinks it came from somewhere or something that is taxable, that's when you may get audited when you come back and unless you have declared yourself a non-resident for tax purposes, you don't want that to happen, unless of course you declare it as income.
The reason I know this is that I run a school in Vancouver and have hired some teachers returning from Asia. 2 of them were audited by CRA a couple of years after they got back and in both cases the trigger seemed to be large deposits into their bank accounts just before they returned. We got hauled into it because we had to produce all their work hours pay etc, because that was part of their audit. By asking a few questions of both them and the CRA and making some observations, I figured out what the procedure was that nailed them. In both cases, neither of them had declared their offshore income with the problem being neither had applied to the CRA for tax exempt status while they were gone. So if you're Canadian, that's something you may want to do.
If you do make a large deposit, be aware that your future problem could be with the CRA depending on your status here.
Bottom line-be careful. |
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Seoul'n'Corea
Joined: 06 Nov 2008
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| Posted: Fri Nov 04, 2011 5:48 pm Post subject: |
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THERE is NO official tax treaty between Canada and S.Korea! This is why we pay our income tax to the Korean government and get it back at the end of the year. Bottom line we do not need to declare it. Already been over this at customs at YVR. I asked them straight out. You pay income taxes in Korea, therefore you don't need to pay tax again.
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T-J
Joined: 10 Oct 2008
Location: Seoul EunpyungGu Yeonsinnae
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| Posted: Fri Nov 04, 2011 6:28 pm Post subject: |
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| Seoul'n'Corea wrote: |
THERE is NO official tax treaty between Canada and S.Korea! This is why we pay our income tax to the Korean government and get it back at the end of the year. Bottom line we do not need to declare it. Already been over this at customs at YVR. I asked them straight out. You pay income taxes in Korea, therefore you don't need to pay tax again.
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Then what on Earth is this?
http://www.fin.gc.ca/treaties-conventions/Korea_2-eng.asp |
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Daelim
Joined: 18 Jun 2011
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| Posted: Fri Nov 04, 2011 6:30 pm Post subject: |
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I was also told what the above poster wrote, about, if you pay taxes in Korea, you don't have to in Canada. I learned the hard way that this is NOT TRUE! Unless you declare yourself as a non resident. Which is easy enough if you don't have any major ties to Canada. I was honest for the first couple of years here, and filed. I paid about $400 each year, and then got audited, and they said I owed another $1500!! Anyways, the long and the short of it is that I fought it, and wrote a letter explaining the situation, was decarled as a non resident, and I got all my money back  Had to pay back the GST I had been getting for the last few years, but that is it. If you do not want to become a non resident, you are going to have to pay on the income you made here. No two ways about it. They take the difference of what you paid here, and what they charge. So, say here you pay the 3.3% or whatever it is, and Canada charges 20% you are going to have to pay 16.7% of your income to CRA. And that is only if you can prove you paid taxes here, if you can't, I think they hit you up for the full 20% (or whatever the exact number is). They will rob you blind if you let them!  |
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raewon
Joined: 16 Jun 2009
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| Posted: Fri Nov 04, 2011 7:25 pm Post subject: |
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I have read (probably on this site) that
Daelim
| Quote: |
| Unless you declare yourself as a non resident. |
is impossible to do. As it's different from
Daelim
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| was declared as a non resident |
.
I'm sure I've read that there is a form to submit, and after it is reviewed, your status will be "declared". You cannot per se "declare" yourself a
non resident. Is that not true?
Daelim: How long had you lived outside of Canada when you took care of this? |
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Captain Corea
Joined: 28 Feb 2005
Location: Seoul
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| Posted: Fri Nov 04, 2011 8:09 pm Post subject: |
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| T-J wrote: |
| Seoul'n'Corea wrote: |
THERE is NO official tax treaty between Canada and S.Korea! This is why we pay our income tax to the Korean government and get it back at the end of the year. Bottom line we do not need to declare it. Already been over this at customs at YVR. I asked them straight out. You pay income taxes in Korea, therefore you don't need to pay tax again.
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Then what on Earth is this?
http://www.fin.gc.ca/treaties-conventions/Korea_2-eng.asp |
Agreed.
Seoul'n'Corea, you really need to learn to hold your tongue if you don't know about the topic. There IS a tax arrangement/agreement between Canada and the ROK. And you can be taxed in BOTH. The thing is, that agreement is in place to avoid DOUBLE TAXATION. That means, that if you pay 10% in Korea, but your rate would be 17% in Canada, you only owe Canada the 7%. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Fri Nov 04, 2011 8:27 pm Post subject: |
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| And while we are on the topic...just for everyone's information as far as Canadians go, being declared a non-resident by the Canadian tax authorities is a NON_BINDING opinion. Meaning that they can reverse said decision at any time. |
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Who's Your Daddy?
Joined: 30 May 2010
Location: Victoria, Canada.
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| Posted: Fri Nov 04, 2011 11:49 pm Post subject: Re: Canadians: I'm sending money home. Let's talk tax. |
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| ttompatz wrote: |
Do be aware that INTEREST EARNED on the deposits may be taxed at the non-resident rate (if you have declared yourself to be non-resident for tax purposes).
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As a non-resident, how did you inform your bank? Did you open a special account?
I don't trust the CDN government not to later deem me a resident again, and take my money if I held my money in Canada.
Non-resident account in Australia seems safer. |
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Seoul'n'Corea
Joined: 06 Nov 2008
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| Posted: Sat Nov 05, 2011 2:59 pm Post subject: |
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[quote="Captain Corea"]
| T-J wrote: |
| Seoul'n'Corea wrote: |
THERE is NO official tax treaty between Canada and S.Korea! This is why we pay our income tax to the Korean government and get it back at the end of the year. Bottom line we do not need to declare it. Already been over this at customs at YVR. I asked them straight out. You pay income taxes in Korea, therefore you don't need to pay tax again.
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Then what on Earth is this?
http://www.fin.gc.ca/treaties-conventions/Korea_2-eng.asp |
Well, I am going to state what I was told before, directly from Canadian authorities, IF you are working in Korea and paying their tax, you DO NOT claim it. Look under article 4. Once you are in Korea you are "residing in Korea". That's why you are exempt. You are paying another countries tax also re-enforced in article 21.
Also if you were reading Article 22 explains clearly about double taxation.
quote:
(c) where, in accordance with any provision of the Convention, income derived or capital owned by a resident of Canada is exempt from tax in Canada, Canada may nevertheless, in calculating the amount of tax on other income or capital, take into account the exempted income or capital. |
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jondepoer
Joined: 02 May 2010
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| Posted: Sat Nov 05, 2011 3:58 pm Post subject: |
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Thanks for the many and varied takes on this matter.
I've been filing taxes as a resident, and not declaring my Korean income. I'm not sure where that leaves me.
Clearly, it's not a simple matter. I think I may keep my money in Korea, and perhaps invest in some sort of term/time deposit instead of sending the money home. The last thing I want is to have any trouble from CRA. |
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Seoul'n'Corea
Joined: 06 Nov 2008
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| Posted: Sat Nov 05, 2011 4:25 pm Post subject: |
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| jondepoer wrote: |
Thanks for the many and varied takes on this matter.
I've been filing taxes as a resident, and not declaring my Korean income. I'm not sure where that leaves me.
Clearly, it's not a simple matter. I think I may keep my money in Korea, and perhaps invest in some sort of term/time deposit instead of sending the money home. The last thing I want is to have any trouble from CRA. |
Actually it's quite a simple matter.
Read
http://www.voyage.gc.ca/publications/korea_coree-eng.asp
You are in residing 1 year or longer in Korea paying Korean tax, you are exempt from Canadian taxes.
Depending on the length of your stay in Korea, you may or may not be liable for payment of Canadian income tax on your income earned in Korea. Before your departure from Canada, it is advisable to contact the nearest Canada Revenue Agency office in order to determine your residency status with regard to Canadian income tax. |
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T-J
Joined: 10 Oct 2008
Location: Seoul EunpyungGu Yeonsinnae
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| Posted: Sat Nov 05, 2011 4:37 pm Post subject: |
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[quote="Seoul'n'Corea"]
| Captain Corea wrote: |
| T-J wrote: |
| Seoul'n'Corea wrote: |
THERE is NO official tax treaty between Canada and S.Korea! This is why we pay our income tax to the Korean government and get it back at the end of the year. Bottom line we do not need to declare it. Already been over this at customs at YVR. I asked them straight out. You pay income taxes in Korea, therefore you don't need to pay tax again.
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Then what on Earth is this?
http://www.fin.gc.ca/treaties-conventions/Korea_2-eng.asp |
Well, I am going to state what I was told before, directly from Canadian authorities, IF you are working in Korea and paying their tax, you DO NOT claim it. Look under article 4. Once you are in Korea you are "residing in Korea". That's why you are exempt. You are paying another countries tax also re-enforced in article 21.
Also if you were reading Article 22 explains clearly about double taxation.
quote:
(c) where, in accordance with any provision of the Convention, income derived or capital owned by a resident of Canada is exempt from tax in Canada, Canada may nevertheless, in calculating the amount of tax on other income or capital, take into account the exempted income or capital. |
Are you citing a document that you denied existed to me the one who provided it? Priceless.
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