QUESTION: Hello Mr. Ingram, We are Swiss/Canadian citizens living since 15 years in Canada. When we immigrated, we opted to keep paying the expensive voluntary social security to Switzerland in case of a return. We were told these payments can't be deducted from income taxes in Canada. Now we worry that possibly due to our Swiss social security pension after 65 of about $15000 each, our OAS and CPP entitlements could be reduced. If so, how can we prevent this? thanks for your advise Best regards -----------------------------------------------------------------------------------------------------------------DAVID INGRAM REPLIES
Your total income in Canada would have to exceed a little over $62,200 each for a clawback to occurr and then it would only apply to Old Age Security. There is no clawback on CPP.
The only way to reduce clawback is to reduce net income. Even if a tax fee social security pension, the amount is still calculated in the net income figure for the purposes of the clawback.
Canadian dividends are nasty when it comes to the clawback because of their large gross-up.
You need to sit down with a financial advisor like Fred Snyder (604) 731-8900 and do a written plan about your cash flow.
You can hear Fred every Sunday on CKBD radio from 9:00 to 10:30 AM at 600 on the AM dial in Vancouver or on the internet at www.600am.com
I will be on that program every Sunday until Xmas and then the last Sunday of each month.
Article 18
Pensions and Annuities
1. Pensions and annuities arising in a Contracting State (SWITZERLAND) and paid to a resident of the other Contracting State (CANADA) may be taxed in the State (SWITZERLAND) in which they arise, and according to the law of that State. However, in the case of periodic pension or annuity payments (except lump-sum payments arising on the surrender, cancellation, redemption, sale or other alienation of an annuity, and payments of any kind under an annuity contract the cost of which was deductible, in whole or in part, in computing the income of any person who acquired the contract), the tax so charged shall not exceed 15 per cent of the gross amount of the payment. For the purposes of this Article, the term "pension" does not include payments under the social security legislation in a Contracting State.
2. Notwithstanding anything in this Convention:
(a) pensions paid by, or out of funds created by, Switzerland or a political subdivision or a local authority thereof to any individual in respect of services rendered to Switzerland or subdivision or local authority thereof in the discharge of functions of a governmental nature shall be taxable only in Switzerland;(b) war pensions and allowances (including pensions and allowances paid to war veterans or paid as a consequence of war) arising in Canada and paid to a resident of Switzerland shall be excluded from the bases used for the computation of Swiss tax, to the extent they would be exempt from Canadian tax if received by a resident of Canada;
(c) pensions and allowances received from Switzerland under the legislation concerning Military Insurance shall be exempt from Canadian tax so long as they are exempt from Swiss tax;
(d) alimony and other similar payments arising in a Contracting State and paid to a resident of the other Contracting State who is subject to tax therein in respect thereof, shall be taxable only in that other State.
--------------------------------
Every Thursday at 12 noon and 7 PM, Fred Snyder of Dundeee Wealth Management
presents free Financial Seminars for his clients, potential clients and anyone who phones and asks to attend.
THERE is NO CHARGE! (I used to charge up tp $999.00 for essentially the same thing)
AND - NO ONE'S ARM IS TWISTED TO BUY SOMETHING.
They are presented at the Dundee Boardroom (holds about 30 people max)
1764 West 7th
Vancouver, BC
phone (604) 731-8900 - ask for Freda to register for free.
These are genuine educational seminars dealing with everything from how to buy a house to making your mortgage tax deductible to buying an RRSP to alternatives to RRSP accounts to estate planning. What started as 13 separate seminars has now evolved into 23 separate topics.
IT IS NOT UNUSUAL FOR PEOPLE TO COME TO ALL OF THEM.
ONE LADY CAME TO 53 separate seminars and her husband came to about 20 with her.
If you have a fiancial consultant, bring them. People have brought their bankers and life insurance agents with them.
Take your spouse, your best friend, your son, your daughter, your mother or your worst enemy But do phone 604-731-8900
Fred Snyder also is the host of ITS YOUR MONEY every Sunday morning on CHBD (600 on AM dial) from 9:00 to 10:30. This is a phone in financial show on which I appear as a guest on the last Sunday of every month. (Origianlly I was the co-host but the program is really devoted to BC finances because of BC Securities Legislation and my practice is world wide.) You can listen to 4 weeks back at www.600am.com and listen to the program live around the world every Sunday morning at the same spot. We have taken calls from around the world. In one case, a lady phoned from Florida, got her answer and then asked if I was the David ingram she knew in Regina back in 1959. Small world as they say.
Call (604) 280-0600 with your question on Sunday Morning.
---------------------------------------------------------------------------------------
-
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax help
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax help.
$1,700 would be for two people with income from two countries
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be $150 to $500.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc.
Just a guideline not etched in stone.
David Ingram expert income tax and immigration help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty advice on bankruptcy