Personal Finance

International Tax Advice

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  • May 13th, 2019 10:10 am
Member
Dec 19, 2007
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Vancouver

International Tax Advice

We're moving to Finland from Canada within the year, and we're starting to consider our current assets.

Does anyone have any helpful tips or suggested tax advisers? I've asked a credit union here, but they just shrugged their shoulders.

We have TFSAs, RRSP and stocks, and we're not 100% how all this is handled under the Finland-Canada tax treaty in place (and I don't trust my personal interpretation).

Thanks!
9 replies
Deal Addict
May 12, 2014
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The first question is: are you ever planning on coming back? Big impact.


The second question is, how much money do you have?

Because it's quite easy to suggest an international tax advisor: Deloitte or any of the other "Big 4".

But this will only be worth it if you are handling a good size portfolio. Otherwise, the simplest thing is just to:

- close your TFSA (no tax consequences) and bring the money along

- consider selling your stocks and bringing the money to Finland and rebalancing your portfolio there according to local tax laws (preference for dividend paying stocks?). Since you'll be stuck with the Canadian exit tax anyway and may need the funds (deemed disposition)

- RRSP is the big one: that you'll have to check vs the tax treaty.

Don't forget principal residence. Are you going to keep it?


Of course Finland, with 53% marginal tax rates, 24% VAT (!!!), and $100,000 speeding ticket fines (!!!!!), is a high tax state, so do plan carefully ahead do avoid costly errors.
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Feb 19, 2010
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FrancisBacon wrote: The second question is, how much money do you have?

Because it's quite easy to suggest an international tax advisor: Deloitte or any of the other "Big 4".

But this will only be worth it if you are handling a good size portfolio.
What would you suggest would constitute a "good size portfolio" or net worth, if you will?
Deal Addict
Feb 17, 2005
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Yeah, if you are not going to come back you should declare yourself as a nonresident. But it does mean you have to cut ties with Canada. Primary ties include owning a house here, still having spouse here, memberships, etc. you’re allowed to have secondary ties while still being a nonresident but if you have too many you can be deemed a resident, secondary ties include credit cards, banking accounts, etc.

https://www.canada.ca/en/revenue-agency ... tatus.html

If you don’t cut your primary ties, it can be a potential headache. I’ve read some retired people still keeping their rrsp’s and accounts while being a nonresident living in the US. Best to go see a financial expert in this area and get some advice. I’m sure you can get some free mini consultation on the necessary action items

Good luck!
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Jul 17, 2008
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I don't see what's wrong keeping "ties" in Canada. If you have a rental income, stocks, etc, you are probably going to be in the low tax bracket in Canada and the tax will be very low. I don't think many countries you emigrate to will come after you for their share of tax you bring from Canada's income (aka US). Many don't care like US and Canada cares about international assets.
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Feb 17, 2005
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Messerschmitt wrote: I don't see what's wrong keeping "ties" in Canada. If you have a rental income, stocks, etc, you are probably going to be in the low tax bracket in Canada and the tax will be very low. I don't think many countries you emigrate to will come after you for their share of tax you bring from Canada's income (aka US). Many don't care like US and Canada cares about international assets.
There's nothing wrong with keeping ties. If you're trying to remain a resident of Canada and don't mind filing a tax return, then that's fine. But if your intention is to claim non-residency and stop filing taxes in Canada, then you should sever your primary ties and some secondary ones. Depends on the country you're in, I don't think I'd ever comfortably say that no country will come after you - there's still a risk. If you're trying to become a resident of that new country, maybe best to be as straight forward as possible on all fronts...don't want to get deported or denied residency due to tax evasion. Looking at the UK, they say if you make 300 GBP or less in foreign income, you don't need to report. Don't know much about Finland.

If you have rental income and made a profit from stocks, you're not just reporting that as your income in your Canadian Tax return. You're reporting that PLUS your income that you made in the foreign country. So you may not be in the tax bracket that you think you're in. If the foreign country has a tax treaty with Canada, the complications could be less. It's best to seek a professional for guidance.
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porkchopbread wrote: There's nothing wrong with keeping ties. If you're trying to remain a resident of Canada and don't mind filing a tax return, then that's fine. But if your intention is to claim non-residency and stop filing taxes in Canada, then you should sever your primary ties and some secondary ones. Depends on the country you're in, I don't think I'd ever comfortably say that no country will come after you - there's still a risk. If you're trying to become a resident of that new country, maybe best to be as straight forward as possible on all fronts...don't want to get deported or denied residency due to tax evasion. Looking at the UK, they say if you make 300 GBP or less in foreign income, you don't need to report. Don't know much about Finland.

If you have rental income and made a profit from stocks, you're not just reporting that as your income in your Canadian Tax return. You're reporting that PLUS your income that you made in the foreign country. So you may not be in the tax bracket that you think you're in. If the foreign country has a tax treaty with Canada, the complications could be less. It's best to seek a professional for guidance.
So Canada also likes to dip their hands in your pocket for income you make outside Canada when you don't live at all in Canada eh? Pretty much like the US then.
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May 12, 2014
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Messerschmitt wrote: So Canada also likes to dip their hands in your pocket for income you make outside Canada when you don't live at all in Canada eh? Pretty much like the US then.
Not at all like the USA. Canada only taxes you if you're a resident, and that's why if you don't reside here you should cut all ties so that CRA doesn't consider you a resident.
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Conquistador wrote: What would you suggest would constitute a "good size portfolio" or net worth, if you will?
Depends a little on what assets are involved.

So if you have a large TFSA and a tiny RRSP, forget the tax advice, just liquidate everything and bring the money over. Also "just liquidate" even if you have a $1M fully paid off principal residence and you're not planning on ever coming back. Keep it simple.

But if you have shares in a private company, say they're worth even as "little" as $100,000 (with future potential upside) then I would pay for some advice. Or if you have 3 teenage kids with maxed out RESP and $200,000 RRSP also invest in tax advice.

Or if you're planning on maintaining some ties to Canada, and/or returning within some number of years, then you should probably get good tax advice almost no matter the size of your portfolio.

OP really has to provide a little more background info.
Deal Addict
Feb 17, 2005
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Besides listing out the details of the OP’s actual situation, good starting point might be to contact the CRA. Wait times are long but you can get some good general guidance on whether your situation would put you in a resident or non resident status. Furthermore you can ask what steps you need to take to achieve that status (ie if you or your wife is receiving universal child care benefits, you’ll have to stop claiming it). Be a cheaper starting point than Deloitte




https://www.canada.ca/en/revenue-agency ... mbers.html

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