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Discussion Starter · #1 ·
Once again, we are considering selling our Canadian home and moving full-time to Mexico. Deciphering Canada Revenue Agency information re, for example, residency for tax purposes, etc. is a time-consuming, frustrating exercise....and often doesn't answer our questions, which perhaps could best be answered by someone who has actually done what we envisage, or is in the process of doing so.
We don't want to bore Forum regulars with our questions, and would really appreciate if anyone who can share their relevant experiences would contact us via Personal Message. We could then exchange e-mails.
To narrow down our situation, if we proceed to sell our home:
---we presume we would meet Mexican income/financial requirements to qualify for
FM3s, (or whatever they're called these days)
---we would own no property in Canada
---all our immediate family, (children, grandchildren, brothers,sisters, etc) reside in
Canada
---all our income is from Canadian sources, (small bank interest, OAS, CPP & QPP,
my superannuation/pension as a retired Federal public servant)
---we both currently hold RRSPs and TFSAs, (my RRSP to be "converted" in 2016).
---we would not work in Mexico, nor have any Mexican-sourced income, except
possibly for some bank interest, should we open Mexican bank account(s).
Can you help, or know someone who could? If so, send us a PM.
 

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Now is a good time to start planning, and your planning can be pro-active as opposed to reactionary. Look at the differences in tax liability with the different residencies, what is more beneficial to you .... then look at the criteria, can you meet it?

I can not answer your specific questions, nor can someone else here, unless they have the same income/amounts and province as you or they are a tax professional..... so save yourself what could be thousands yearly and talk to a profession.

If your interested in learning more, Canada Revenue Agency does have phamplets and guides available ~ you should be able to google this stuff :)
 

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Hey Don; Just a reminder, that perhaps, you forgot a couple other factors about moving down south year-a round. Rainy season-humidity, not like winter mos.- and life-style-¿who is around during the mos. of April to Oct.? Daryl
 

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Hey Don; Just a reminder, that perhaps, you forgot a couple other factors about moving down south year-a round. Rainy season-humidity, not like winter mos.- and life-style-¿who is around during the mos. of April to Oct.? Daryl
What are youn really trying ton say Daryl? Rainy season and humidity? Life- style? Please explain yourself if you have any real interest and, if not, please don´t mislead people who have honest questions. Mexico has many climate variations but there is nothing here even approaching the utter misery of anyplace in Canada
 

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Hey Don; Just a reminder, that perhaps, you forgot a couple other factors about moving down south year-a round. Rainy season-humidity, not like winter mos.- and life-style-¿who is around during the mos. of April to Oct.? Daryl
What part of Mexico are you referring to?
 

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Don't worry about interest from a normal bank account ...... very hard to find
Quite true. I'm just glad to have an account with a Mexican bank that doesn't levy a service charge as long as I maintain a minimum monthly balance of $2000.
 

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What are youn really trying ton say Daryl? Rainy season and humidity? Life- style? Please explain yourself if you have any real interest and, if not, please don´t mislead people who have honest questions. Mexico has many climate variations but there is nothing here even approaching the utter misery of anyplace in Canada
LOL!!!!!!!!. You've spent time here? We spent some time in Tulum in June with a and I have to say it was brutal on us delicate Canadian creature. Pretty much the 'polar' opposite of a Canadian winter.;)
 

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Quite true. I'm just glad to have an account with a Mexican bank that doesn't levy a service charge as long as I maintain a minimum monthly balance of $2000.
I pay no service charge on my bank accounts in the USA, and that's not because I'm carrying large balances. Persons who have direct deposits of income into their account are fee-free at my banks, and some/many banks offer Seniors fee-free accounts. As for interest income ... almost non-existent on checking and savings accounts, and CD accounts pay a pittance these days.
 

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I pay no service charge on my bank accounts in the USA, and that's not because I'm carrying large balances. .../QUOTE]

Two thousand pesos is not a large balance (right now about $133.00 US) which is what my bank requires at the moment to avoid a service charge.
 

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Hound Dog: Sometimes you have a good sense of humor but your remarks about Canada may have been intended to be cute however they are NOT. If you were referring to the weather It is only bad in the winter. Canada ranks way above Mexico or the USA on the lists of the best countries in the world: Education, social services, low crime rates, cost of living, etc. Neither Mexico nor the USA has a social safety net equal to Canada. Winters can be brutal but some people like winter outdoor sports ( think Colorado). Personally I prefer Mexican winters!
 

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Discussion Starter · #17 ·
I don't understand your last sentence. "so notices" what?

I get all my bank statements by email once a month.
Talk about thread creep! Nine of fourteen responses deal with the minutiae of Mexican bank accounts. No wonder I asked for PM's in response. My aim was to simply describe our sources of income....and the only income we might ever have from a Mexican source might be some small interest from (extremely) modest bank savings accounts.

Deendah: Your points about the off-season weather, humidity, and "social scene" are certainly valid, but for the purposes of this exercise, assume we're past that. Every time we face the issue of emigrating, it always comes down to anticipated difficulties selling our home, (which we would absolutely have to do), and concerns over the availability, cost and/or quality of healthcare. That, and the fear that, if we had to return home for whatever reason - whether it was after a year or 5 years, or 10 years - we would be frozen out of the housing market. We may come to the conclusion that we are already living the best of both worlds right now: half the year in Zihua and the other half in the Okanagan Valley.

JeriLyn: Our financial situation is nowhere near complicated enough to justify talking to a "tax professional". And when it comes to emigrating to Mexico, I expect I already know as much as most of the "professionals" up here.

(Here's where the peanut gallery says: "So why are you asking for help on an ex-pat forum?")
 

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You may already be familiar with these websites, but in case you're not ....

Determining your residency status

Income Tax Folio: S5-F1-C1, Determining an Individual's Residence Status


CRA states they decide if a person is a "deemed" or "factual" resident for tax purposes on a case by case basis. Here is a link to a form that can be sent to CRA to have them determine if you would or would not be considered resident in Canada for tax purposes, even if living full-time in Mexico.

NR73 - Determination of Residency Status (Leaving Canada)

Based on the following paragraph, even if CRA considers you a non-resident, you are still subject to tax on income from sources inside Canada, which according to your post is all your income.

"Under the Canadian income tax system, an individual's liability for income tax is based on his or her status as a resident or a non-resident of Canada. An individual who is resident in Canada during a tax year is subject to Canadian income tax on his or her worldwide income from all sources. Generally, a non-resident individual is only subject to Canadian income tax on income from sources inside Canada.

An individual who is resident in Canada can be characterized as ordinarily resident or deemed resident. An individual who is ordinarily resident in Canada will be subject to Canadian tax on his or her worldwide income during the part of the year in which he or she is resident in Canada; during the other part of the year, the individual will be taxed as a non-resident. An individual who is deemed resident in Canada in a particular year will be subject to Canadian income tax on his or her worldwide income throughout that year."
 

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Discussion Starter · #19 · (Edited)
Thanks, ojosazules11. Yes, we have all that Canada Revenue Agency info.

One (relatively simple) question we've been unable to have CRA answer is this:

Assume, for the moment, that CRA decides we are "non-residents" for Canadian income tax purposes. Then, under the existing tax treaty between Canada and Mexico, each of our income sources, (all Canadian) would be required to withhold 15% income tax from all payments....OAS, CPP/QPP, my Federal gov't pension....and at least 15% from any future RRIF withdrawals.

Right now, due to our relatively low joint income, and thanks to income splitting, our actual income tax obligation is very low....much closer to 1 or 2%, rather than 15%.

Question: If 15% income tax has been withheld, but our actual tax obligation is substantially lower, do we get refunds when we submit our tax returns?

As "non-residents" for tax purposes, we can't imagine that we would be required to pay more Canadian income tax than a "resident". But who knows?
 

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I don't understand your last sentence. "so notices" what?

I get all my bank statements by email once a month.
I live in the sticks and I think the "mailman" just doesn't feel like it ..... because it's all the mail I get. I'm sure the statements are issued from a central location and not the local bank .... so maybe they don't get to Melaque.

I'm gonna ask other Gringos here
 
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