RRSP and Income tax for Canadians

jpharvey · 2016-11-14T16:46:36+01:00

Explore tax implications of RRSP withdrawals and pensions for Canadians relocating to Ecuador, including non-resident tax rates and financial advice.

jpharvey New member

Member since 05 October 2015

jpharveyNew member14 November 2016 14:46:36

Hi,
I tried to search and found some information but my question may be somehow too specific.
We are planning to move from Canada to Ecuador in 2021. We bough a land last year but are not in a hurry to build before we actually move and see how things are going for about a year.
We are planning to live in Ecuador full time, sold our house here already and plan to have no economic ties with Canada when we move to Ecuador, getting a non-resident status as soon as possible.
We will both have pensions being paid by our employers (government). If I understand well, these Canadian income will get income tax of 15% at the source with a non-resident status.
My question is about RRSP. If we wait to be certain that we have a non-resident status and want to take out a large amount of RRSP all at once to build a house, will this amount have only 15% deducted for income tax as well?
If anyone knows who I can contact to have some financial advise for someone going to Ecuador, please send me their contact info.

El Jer Member

Member since 04 June 2015

El JerMember14 November 2016 17:29:49

JP: Not a professional but have done quite a bit of reading on this and I'm quite sure that RRSP withdrawals are subject to %25 withholding tax. I have an accountant in Ottawa who specializes in int'l taxation but he's older and I don't think he's taking on more clients these days. You can PM me if you have any more questions/want to stay in contact.

cccmedia Ecuador/Colombia Expert

Member since 13 March 2014

cccmediaEcuador/Colombia Expert14 November 2016 17:52:46

10281

jpharvey wrote:
We are planning to move from Canada to Ecuador in 2021. We bought land last year but are not in a hurry to build before we actually move and see how things are going for about a year....

If anyone knows who I can contact to have some financial advice for someone going to Ecuador, please send me their contact info.

It is wise of y鈥檃ll to wait at least a year after you move to Ecuador before building.聽

The fact that your coastal area of Olon/Montanita was not badly damaged in last April鈥檚 major earthquake and the aftershocks is in no way a promise of future results.聽 Everything in the Ring of Fire zones -- and that includes all the way to New Zealand which had its own 7.8 magnitude quake this weekend -- is vulnerable.聽

I wouldn鈥檛 advise building anywhere on the coast nor giving out your financial information to a 鈥榝inancial advisor' you haven鈥檛 met in person but via referral over the Internet.

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jpharvey New member

Member since 05 October 2015

jpharveyNew member14 November 2016 18:14:51

Thanks to both of you for your honest answers.
We will certainly wait at least a year before deciding to build or not. There is no rush and we can rent anywhere to make sure we make the right choice.
I have contacted Canada Revenu and got the confirmation that any income that is periodic like a pension has a special agreement with Ecuador to have the rate of 15% income tax. Any revenu that is a one time payment like taking out RRSP is getting the basic deduction of 25%.