Canada Pension

[Kentech]

Hi all, any canadians having their canada pension direct depost to a bank in the phils? If not how are you dealing with this issue?

Thanks Ken

[Dave Hounddriver]

I know it is possible, but the people I have met who do it have the money deposited into a Canadian Dollar account in a Philippine bank. Problem is you are subject to whatever exchange rate that bank wants to give you when you draw the money out in pesos. Oh yeah, they will tell you that you can draw the money out in Canadian funds but you can't because they will only give you Canadian funds IF they have Canadian currency on hand and they never do. They will not 'order in' Canadian funds to give you. The Americans have got it made because there is a ready supply of US dollars at the banks and they can draw out US dollars and go where the exchange rate is best.

I deal with it be keeping my Canadian bank account and having money transferred over every couple of months whenever I can get a decent exchange rate.

[i am bob]

I checked into this a while ago... Well, not exactly the same but close enough as Canadian Military pensions are handled the same way and by the same group...

If you wish to have your entire pension sent to the Philippines, the government will send it to the bank in the Philippines you chose - so long as it is on the list they provide and it is quite an extensive list. It will be sent in Philippine Pesos at the rate offered through the Bank of America. Should you wish to stop your pension check going to this bank, you will have to notify the Canadian government and tell them to stop the payments - this is suppose to be within one month of notification but sometimes it can be done that month and others might take an extra month. Also, as you live outside Canada, CRA states that you will be taxed at a straight 25% Income Tax rate at source and no Income Tax returns are required unless you have other income that you need to pay taxes on. There is no "Minimum Income" amount or other deductions allowed so if you want to keep ot a lower tax bracket or have access to deductions, you will have to establish a residence in Canada and spend the appropriate amount of time living there. Yeah, that kind of stinks, don't it?

As for me, I am going to leave my pension going to my normal bank account in Canada and make sure that the bank (my edit) know that, even though I am using that account, I am physically living in the Philippines and will be transferring what I need monthly by another company. The company I will be using is called World Remit - they give me a much better exchange rate than the bank and their charges per transfer are much lower than the bank. The only issue is I can only send a maximum of CDN$ 950 per transfer. Of course that is just under P40,000 at the moment so that isn't so bad. And they say it's only CND$ 950 per transfer max -not per month like other companies.

Edited July 28, 2012 by i am bob

[Wad]

 Also, as you live outside Canada, CRA states that you will be taxed at a straight 25% Income Tax rate at source and no Income Tax returns are required unless you have other income that you need to pay taxes on. There is no "Minimum Income" amount or other deductions allowed so if you want to keep ot a lower tax bracket or have access to deductions, you will have to establish a residence in Canada and spend the appropriate amount of time living there. Yeah, that kind of stinks, don't it?

As for me, I am going to leave my pension going to my normal bank account in Canada and make sure that the bank (my edit) know that, even though I am using that account, I am physically living in the Philippines and will be transferring what I need monthly by another company. The company I will be using is called World Remit - they give me a much better exchange rate than the bank and their charges per transfer are much lower than the bank. The only issue is I can only send a maximum of CDN$ 950 per transfer. Of course that is just under P40,000 at the moment so that isn't so bad. And they say it's only CND$ 950 per transfer max -not per month like other companies.

 

I'm confused, according to the OAS application it states that " the tax rate is 25% of your monhtly OAS pension unless you live in a country that has a tax treaty with Canada." As far as I've read canada does have a tax treaty with the Philippines. What am I missing here?

 

How do you get around having it deposited into a Canadian bank and living in the Philippines?

 

Thanks,

 

Wad

[Dave Hounddriver]

 

 Also, as you live outside Canada, CRA states that you will be taxed at a straight 25% Income Tax rate at source and no Income Tax returns are required unless you have other income that you need to pay taxes on. There is no "Minimum Income" amount or other deductions allowed so if you want to keep ot a lower tax bracket or have access to deductions, you will have to establish a residence in Canada and spend the appropriate amount of time living there. Yeah, that kind of stinks, don't it?

As for me, I am going to leave my pension going to my normal bank account in Canada and make sure that the bank (my edit) know that, even though I am using that account, I am physically living in the Philippines and will be transferring what I need monthly by another company. The company I will be using is called World Remit - they give me a much better exchange rate than the bank and their charges per transfer are much lower than the bank. The only issue is I can only send a maximum of CDN$ 950 per transfer. Of course that is just under P40,000 at the moment so that isn't so bad. And they say it's only CND$ 950 per transfer max -not per month like other companies.

 

I'm confused, according to the OAS application it states that " the tax rate is 25% of your monhtly OAS pension unless you live in a country that has a tax treaty with Canada." As far as I've read canada does have a tax treaty with the Philippines. What am I missing here?

 

How do you get around having it deposited into a Canadian bank and living in the Philippines?

 

Thanks,

 

Wad

 

You need to stay a resident of Canada who is here on a tourist visa to avoid having the 25% deducted.  You can read the residency requirements here:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

 

If you maintain a residency and file Canadian tax returns you will likely pay a lot less than the 25%.

 

Edit:  I think I would use the term domiciled in Canada as more correct.  I can have more than one residence.  Many people do.  But the legal domicile is the place where you pay your taxes and according to some legal dictionaries is a person's true, fixed and legal home.  I am domiciled in Canada and pay taxes there.  I have no legal status as permanent resident of Philippines or any other country so CIC in Canada has no choice but to allow me to declare my domicile in Canada and thus I pay no tax (below the threshold).

Edited October 22, 2013 by Dave Hounddriver

[i am bob]

Also, as you live outside Canada, CRA states that you will be taxed at a straight 25% Income Tax rate at source and no Income Tax returns are required unless you have other income that you need to pay taxes on. There is no "Minimum Income" amount or other deductions allowed so if you want to keep ot a lower tax bracket or have access to deductions, you will have to establish a residence in Canada and spend the appropriate amount of time living there. Yeah, that kind of stinks, don't it?

As for me, I am going to leave my pension going to my normal bank account in Canada and make sure that the bank (my edit) know that, even though I am using that account, I am physically living in the Philippines and will be transferring what I need monthly by another company. The company I will be using is called World Remit - they give me a much better exchange rate than the bank and their charges per transfer are much lower than the bank. The only issue is I can only send a maximum of CDN$ 950 per transfer. Of course that is just under P40,000 at the moment so that isn't so bad. And they say it's only CND$ 950 per transfer max -not per month like other companies.

I'm confused, according to the OAS application it states that " the tax rate is 25% of your monhtly OAS pension unless you live in a country that has a tax treaty with Canada." As far as I've read canada does have a tax treaty with the Philippines. What am I missing here?

How do you get around having it deposited into a Canadian bank and living in the Philippines?

Thanks,

Wad

You need to stay a resident of Canada who is here on a tourist visa to avoid having the 25% deducted. You can read the residency requirements here:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

If you maintain a residency and file Canadian tax returns you will likely pay a lot less than the 25%.

Edit: I think I would use the term domiciled in Canada as more correct. I can have more than one residence. Many people do. But the legal domicile is the place where you pay your taxes and according to some legal dictionaries is a person's true, fixed and legal home. I am domiciled in Canada and pay taxes there. I have no legal status as permanent resident of Philippines or any other country so CIC in Canada has no choice but to allow me to declare my domicile in Canada and thus I pay no tax (below the threshold).

Had to sneak out before the doc catches me so I could get this in... There is a new CRA document out since I first posted the info above. To determine residency in Canada is really confusing and often requires submitting a form to CRA to decide what category you fall under. If you own property (but don't lease it), you can argue for residency. I don't so it gets easier or more confusing - depending on what i want to qualify for. I am looking at arguing residency through having my pension delivered to a Canadian bank account, my international writing royalties (as small as they are) direct deposited to my Canadian bank account, a Canadian bank credit card, a Canadian telephone number (that I can access via internet) and a private Canadian health plan. Now why would I want to keep paying Canadian taxes? Because my main source of income is a Canadian Forces pension and I will see more if I can pay at Resident rates.

Go to the CRA site and look up "Residency". There will be a link to a document with further info on residency. This will take you to a page of canceled documents. If you scroll down a few, you will see the canceled doc and a link to the new one dated for 2013. Still, submitting to CRA is the only way to actually have your situation determined.

[Wad]

Thanks gentlemen..a lot to ponder. The Canadian government sure doesn't make it easy !

[Papa Carl]

Great info guys, at 58 I don't qualify as yet, and I hope to combine my SSS (or equivalent) payments in Canada, the UK, and the Philippines, as I know this can be done. I worked a total of 16 years in Canada, 14 years in the UK, and so far 6 years in the Philippines, which should provide at least a min. of financial assistance for living here.

I know this is a complicated process, which is why I am starting to work on it now!

 

 

Papa Carl

[MacBubba]

I know this is a complicated process, which is why I am starting to work on it now!

 

Please keep us posted on your findings...thanks.

[Papa Carl]

 

I know this is a complicated process, which is why I am starting to work on it now!

 

Please keep us posted on your findings...thanks.

 

 

No problem MacBubba, as I have said, I know that the Canadian, UK, and Philippines have agreement to share and combine SSS contributions, so that all will be considered as total for any one or all three countries. I know that I am eligible for the Canadian OAS, as I lived in Canada for at least 20 years after turning 18. I am also eligible for the CPP pension as I worked in Canada for 16 years. 

 

I have all the relevant websites which provide this information, however as I am only 58 I am not permitted to start the process, unless I am going to take a reduced pension starting at 60 years of age.

 

I also confirmed that Ellie is entitled to both my OAS and my CPP pensions after my death, providing that I register both our marriage, and Chiya's birth at the Canadian embassy here in the Philippines. (Ellie would get less money after Chiya turns 18, but she will still get potentially 546 Canadian dollars per month. Which is not a lot, but at least is something after my death.

 

 

Papa Carl