Returning to Canada - Taxes, Accounting, and Banking (2024)

The short answer: No.

The longer answer - part 1: Moving money to Canada: If you meet the following conditions you may transfer to Canada as much money as you wish before or at the time of your move and these funds will not be subject to taxes in Canada:

The longer answer - part 2: For money and investments you leave outside of Canada when you return, whether that is to be repatriated 1 month, 1 year, or 10 years later you will not be taxed on the benchmark value of the money and investments as of the day before you arrive in Canada to become tax resident here. This is important:

Only gains earned from the day you arrive in Canada forward in time, on your savings (interest earned), investments (dividends, realized profits from selling them), or overseas business profits are taxable in Canada. Not on any gains made before you move back or on the value of your assets at the time you move back.

One typical concern returning Canadians have 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 physically bringing into Canada through an airport or land border crossing, not any amounts you transfer electronically, which has no limit and no reporting requirement at the border or airport. Any amount over CDN $10,000 in physical cash, gold coins/bullion, raw diamonds, or other liquid physical forms of financial currency or assets (such as a physical bank draft payable to yourself that you bring with you) must be reported at the time you enter Canada. Preparing ahead for this reporting is important: Download the Government of Canada's E677 form and complete it before you arrive.

You will not need to pay tax on what you have physically with you that is cumulatively over the CDN $10,000 limit 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 returning Canadian brought CDN $350,000 in gold bars with him and his family on the plane to Canada from Dubai. While this is completely acceptable legally and is not taxed in Canada, I do not recommend bringing these amounts with you for security reasons. There are money, bullion, and jewellery shipping companies which specialize in securely shipping high value amounts of gold/silver/jewelry. Please use one of these services if you are bringing large values of physical assets. The risk of theft is too high and you will also be tied up at the airport while CBSA processes your paperwork!

"But nobody will know. We will keep it a secret and hide it in our clothes!"

No, just no. I recommend you do not bring very high value amounts of cash, gold, jewellery, 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 in particular 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 foreign bank account at least a week before you depart for Canada.

Simple.

Then you can transfer this money to Canada before you leave or when you come back and it is clearly yours at the time of your return. No later tax questions of any kind with the government of the country you are in now or with the Canadian government after you return.

If you are in the process of selling a property abroad and expect it to sell in the near future (within 3 months and within the same tax year) you are fine from the perspective of taxes in Canada. Your property is already listed for sale at a price that is clearly publicly available. There is no taxable "gain" if it sells at or around the asking price.

However, what if you plan to list the property for sale in the more distant future?

The key in this case is to have a solid third-party professional valuation done of your overseas real estate and on all your overseas investments at the time your return. This becomes your benchmark valuation for when you start paying taxes in Canada. Any capital gains, rental income, interest income, dividends, or profits you earn starting from the day you return to Canada onwards become taxable in Canada.

To be clear and stated again: You pay tax in Canada only on all forms of income earned from the day you return to Canada onwards in time. 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 as a benchmark of the value of your assets at that time from which to calculate and prove the gains you earned after moving back.

Side note: Do I seem to be repeating myself again and again in what I wrote in the sections above? Yes, I am. Why? Because this is the #1 question I receive from expatriate Canadians. I have literally answered this perhaps 1000 times. There is a narrative of fear that is shared among expatriates that "Canada will tax all the money you made in ______ [country] when you move back!!!!" It is usually shared between people abroad with wide eyes, a hushed tone, and an urgent fear-inducing body posture or on the Internet with lots of righteous, authority-driven wording.

And it is a lie.

So I repeat myself above to help cut through any fear you may be experiencing. Obtain clear documentation/proof of the value of the assets you have anywhere outside of Canada as of the time you move back. These assets will not be taxed in Canada when you move back.

(I hope the rest of your day is peaceful after reading this!)

Important: The guidance above is for the Canadian side of the tax equation - taxes that you do or don't pay in Canada to the Canadian government in relation to your move back to Canada.

However, you must plan carefully for any tax implications in the country you are leaving! In particular, the IRS in the United States can levy huge penalties if you do not plan your move carefully and file all the appropriate paperwork before you leave and when you do your first dual-filing tax return once you are back in Canada. Other countries have their own regulations, laws, and punitive penalties that you must prepare for!

Moving back from the U.S.? See the USA Resources section of this site for more information on taxes.

Final word of caution: Please be very proactive about researching and planning your exit taxes from the country you are in. Occasionally I get an email from someone who tells me I am wrong and that they paid, and everyone must pay, huge tax penalties. When I gently check in with them I immediately hear that they didn't do any tax planning and did no required paperwork when exiting the country they were leaving (sigh). The world is complicated, folks! Plan for it proactively for the country you are leaving in order to minimize any questions, hassles, and tax penalties later!

Bringing your vehicle into Canada with you from the U.S. will usually result in taxes in the form of GST/HST and possibly import duties. Vehicle imports are detailed more fully on the "Moving Back from the USA" resource page of this site and I recommend you visit 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 normal vehicles of under 15 years of age from countries other than the U.S. and Mexico. There are very special exceptions (it is possible for collector vehicles and/or a vehicle older than 15 years of age), but normal current age vehicles may only be imported from the USA. And those older vehicles? The cost and process of shipping and getting them adapted and inspected for Canadian use can be VERY expensive. On reflection, only 1 or 2 of my clients have ever moved vehicles back to Canada from a country other than the U.S. It is just too expensive and administratively difficult!

Is that what you want the CRA to feel about you?

A quote from a Canadian abroad who chose to ask the CRA to declare him non-resident:

Top of page | Your thoughts? | Professional Help

For most Canadians returning from the U.S. who have significant assets it is really important to research tax rules and regulations carefully. If you don't have the inclination to do this, engaging my support and/or the support of a professional cross-border tax accountant in Canada makes sense and save you a lot of potential time, hassle, stress, and money. Knowing the tax rules and regulations is particularly important for the first year after you return when almost all returning Canadians have to start filing tax returns in both countries (called "dual filing").

If you are returning from Hong Kong, the UK, the UAE, Australia, etc., engaging the support of an international tax accountant is usually not needed unless you have very complicated personal investments, trusts, business assets, etc.

Returning from the U.S.? Here are some areas that can cause you complications and result in costly tax payments and penalties. Getting proactive professional support really makes sense in these cases!:

I have met and spoken with several tax accountants and tax lawyers across Canada who I can recommend and for whom I have received feedback from happy clients that we have in common. Please note that I receive no commission or other benefit from these recommendations so you can trust that these are great professionals to work with.

The following link to the "Professionals" resource page on this web site:

It used to be the case that simply having a bank account and doing banking in Canada could trigger you being considered resident here, with resulting tax implications. This is no longer the case. Financial assets of all kinds move around the world daily in millions of different transactions. Simply having a bank account or other financial investments in Canada (such as a "parked" RRSP) will not impact your non-resident tax status.

Important: When you leave Canada do not change your bank account, credit card, or other addresses "to my mom's house." This may seem convenient but your are breaking tax law (banks must have accurate tax domicile information) and you are making it appear you live in Canada! Change your bank and any other financially and tax-related address to your U.S. or overseas address. Didn't do this when you left? Do it now. Seriously, it is worth doing to protect your non-resident status.

What about a credit card? You can keep a Canadian credit card but use it only sparingly and keep it really just for the sake of your credit history in Canada staying active. This is because a credit card, if used during your vacations here and when you are overseas, can add to you appearing to have more than an "arms-length" tie to Canada. In other words, using a Canadian credit card regularly starts to make you look like a resident of Canada. Not a major tie by itself but in combination with other ties it starts to paint a picture you may not want painted. And a side-note: Why use a Canadian credit card

Can you open a bank account from abroad?

From the U.S. it is much easier than from any other country. TD USA and RBC USA can facilitate the opening of a Canadian bank account. Check with them first if you are in the U.S. and don't want to open an account when you are visiting Canada (the very easiest method) but wish to do so remotely. Please see the USA Resources on this web site for more details.

If you are outside the U.S. and Canada:

To open a bank account in Canada while you are physically abroad in Asia, Europe, Arabia, etc. it is possible. The Royal Bank of Canada (RBC), TD, and CIBC for example, now allow you to open a "deposit only" bank account just before you come to Canada (not if you plan to arrive more than 90 days from the time you open the account).

However, 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.

Your experience with Canadian banks while you are non-resident can vary until you are physically present in Canada which is when it is easiest to open an account or confirm one. The lesson: Be persistent when contacting a Canadian bank from abroad as some representatives may not understand that you may be able to access "newcomer" packages or be able to open a new account because you are a Canadian citizen.

A useful and illustrative story from a client:

RBC's process for opening new bank accounts from outside Canada

Here are the steps:

"Can we keep our U.S./overseas bank accounts when we move back to Canada?"

This is a common question. The answer is "yes".

There is no legal reason from Canada's perspective as to why you can't keep a U.S. or other country bank account. Most Canadians returning from the U.S. keep at least one bank account there.

Other countries may not allow you to keep your bank account when you leave their country and become resident in Canada. Be sure to check on their regulations regarding bank accounts for the country you are leaving.

Paul Kurucz

Canada

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