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Im in the process of looking at moving to costa rica on a permanent basis if at all possible. My concern is with my retirement investment and the tax implications with the CRA.
Any help would be greatly appreciated.Unless something has changed, income earned outside of Costa Rica is not taxable in CR. In the US, what you earn there is still taxable, no matter where you live, unless you live someplace that the IRS will be unable to find you. When I see the drone, I just surrender….
Not sure how Canada handles taxes if you live somewhere else, but I suspect you would be liable for whatever you owe in your home country, but CR has no claim on this income.U.S. citizens are taxed on their worldwide incomes regardless where that income is received. There is a tax exclusion of around $95,000 for income derived from employment (actual work) outside the U.S., but that income must still be reported on the federal income tax return. The foreign earned income tax exclusion applies only to compensation for work. It does not apply to rents, interest or dividends, capital gains, and other forms of unearned income.
Costa Rica taxes most income derived in Costa Rica. Actual collection is another matter.
[quote=”Hotfyre60″]Im in the process of looking at moving to costa rica on a permanent basis if at all possible. My concern is with my retirement investment and the tax implications with the CRA.
Any help would be greatly appreciated.[/quote]That depends on what you want to do with it. Do you want to move your investments to CR? Hide the income from CRA? Will you remain resident for tax purposes in Canada, or become a non-resident of Canada? Residency status depends on where you are materially living, not where you spend your time. If you’re not looking to hide or evade anything, your best resource is the CRA itself. I’ve always found their help line people to be helpful. The CRA website is also crammed with useful information… 🙂
You really should contact your local tax expert and not rely on forum members, especially when most replying are from the USA.:roll:
Also check with your local government ‘Service center’.
For tax purposes you may wish to become a ‘non-resident of Canada’.
An excerpt from the ‘Service Canada page’ .
“If you are a non-resident of Canada for income tax purposes, your CPP payment may be subject to non-resident tax up to a maximum of 25% of the gross benefit amount. The tax rate depends on the country where you live. If your income is low, you can apply to have the rate reduced. For more information, please contact the Canada Revenue Agency”.[quote=”costaricafinca”]You really should contact your local tax expert and not rely on forum members, especially when most replying are from the USA.:roll:
Also check with your local government ‘Service center’.
For tax purposes you may wish to become a ‘non-resident of Canada’.
An excerpt from the ‘Service Canada page’ .
“If you are a non-resident of Canada for income tax purposes, your CPP payment may be subject to non-resident tax up to a maximum of 25% of the gross benefit amount. The tax rate depends on the country where you live. If your income is low, you can apply to have the rate reduced. For more information, please contact the Canada Revenue Agency”.[/quote]
We will be moving to Mexico when our home sells (hopefully in a month or two). Our home equity and pensions will stay in Canada in our same bank account and the pensions will be taxed at the source by the fed/provincial governments. OAS, CPP and Super Annuation (municipal pension fund) will be taxed by the CRA based on an agreement with Mexico that sets the rate at 15%. We were told we must continue to file our Canadian taxes and could expect to get most of that tax back at filing time. There will be no capital gains applied to our home sale because it is our principle residence, therefore it is not considered taxable income. There are a few other things to consider, such as how the CRA rates your conection to Canada in the long term, so check on their website to place your selves in a catagory. But after all the advice you get here in digested, I agree that a visit to a tax lawyer is your best bet.
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