Do I pay Canadian tax on money I send to family in the Philippines?
No. A remittance is not income to the person sending it; it is a transfer of money you have already earned and already been taxed on. Sending it does not create a second charge, and it does not generally produce a deduction either. What does matter on this corridor is the other direction: what you own and hold in the Philippines, because Philippine property, deposits and business interests are reportable in Canada whether or not they produce income. Files on this corridor are rarely wrong about the remittances and often incomplete about the assets.
Which country taxes my Philippine rental income first?
Income from property is normally taxed first by the country where the property is, and the country of residence then taxes the same income and gives relief for what was charged there. So expect a Philippine charge on the rent, a Canadian return that includes the same rent, and a credit claim to stop the amount being taxed twice over. Two practical points. The rental profit has to be recomputed on Canadian rules rather than copied from the Philippine figure, because the two systems do not measure income identically. And the credit is limited to the Canadian tax on that rent.
Do I have to tell the CRA about a house I own in the Philippines?
If you are a Canadian resident, the question has to be answered rather than avoided, and the answer depends on how the property is used. Canada asks residents about property held outside the country, with different treatment for personal-use property and for property held to produce income or as an investment. So a house occupied by family is a different item from one that is rented out, and a parcel of land held as an investment is different again. Describe the actual use accurately. This is the most common gap on this corridor, and it is a reporting failure rather than a tax bill, which makes it an unnecessary one.
My Philippine bank pays interest, so who taxes it first?
The country where the deposit is held generally takes its charge first, usually by deducting at source before the interest reaches your account, and Canada then taxes the same interest with relief for what was charged. That means the figure credited to the account is a net figure, and the amount to report in Canada is the gross one. Ask the bank for the certificate or statement showing what was deducted, because the credit has to be evidenced. The account itself is also a reportable holding in Canada, separately from the interest, and that part gets missed far more often than the income does.
Is my share in the family business in the Philippines reportable in Canada?
An interest in a business held outside Canada is reportable by a Canadian resident, and the obligation attaches to the interest rather than to any distribution. So a share in a family enterprise that has never paid you anything still belongs in the Canadian filing. Beyond the reporting, the income the business earns has to be characterised, because certain kinds can reach a Canadian shareholder's return before money is distributed. Informality is the practical difficulty here: family arrangements are often undocumented, and the first task is usually establishing what you actually own.
I only support family back home, so is there anything for me to file?
The support itself is not the filing question. Look instead at what your name is on. On this corridor the tax issues sit in assets and accounts rather than in the flow of money: a deposit account opened for a relative to draw on, a property bought with remitted savings, a share in a business, land inherited from a parent. Any of those can create a Canadian reporting obligation even in a year they produce no income. Take an inventory of what you hold in the Philippines, in your own name or jointly, and work through it item by item before assuming there is nothing to do.
Can I avoid capital gains tax on a foreign property?
Not by virtue of it being foreign — there is no exemption for that, and the "keep it offshore" advice you may have read is how people acquire penalties rather than savings. What genuinely reduces the gain is ordinary and legitimate: principal residence relief where the property qualifies and the designation is made correctly, a properly built cost base including acquisition costs and capital improvements, the timing of the disposition, the treaty rules for real property, and credit for the foreign tax paid. See principal residence and foreign property.
What is a double tax treaty and what does it actually do?
It is an agreement between two countries that divides up the right to tax. Article by article it decides which country taxes employment income, dividends, interest, royalties, pensions, property and business profits — and where both may tax, it caps what the source country can withhold and tells the other to give credit. It also breaks residence ties and opens a government-to-government channel for disputes. What it never does is apply itself: a treaty position is claimed. See our treaty work.
