# Proof of payment via Wire Transfer



## Joe Black (Aug 3, 2015)

So here's the backstory:

My mother passed away a couple years ago. She received a small German pension paid directly to her bank account. There were several extra payments made after she died and before the account was closed, and it wasn't noticed by my lawyer or myself - we just lumped it in with the total estate amount.

Recently, the German government contacted me asking me to repay the overpayments, they are asking for around $1300 Euros. I've set up an account with CanadianForex to make the payment via wire transfer.

I've never done an international wire transfer before. My question, how does this payment get attributed to the amount I owe to the pension department? I mean, from their perspective, some money shows up in their account one day - how do they know what it's for? Do I tell them beforehand "look for a payment from me this week" or some other communication?

The reason for my concern is that my mother used to complain that the Germans would tell her she had to pay her German income taxes, which she did at her bank (I assume it was with a wire transfer), but then they would not acknowledge that she made a payment. I'm sure they actually got the money but apparently no one applied that as a payment to her taxes. I want to be sure that what I send is acknowledged as payment against this debt.


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## Spudd (Oct 11, 2011)

Can't you contact whoever contacted you (did they give a phone number, email address, street address?) and ask them how this should work?


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## carverman (Nov 8, 2010)

Joe Black said:


> So here's the backstory:
> 
> My mother passed away a couple years ago. She received a small German pension paid directly to her bank account. There were several extra payments made after she died and before the account was closed, and it wasn't noticed by my lawyer or myself - we just lumped it in with the total estate amount.
> 
> ...


It's a bit of a delema when your are involved with with your late mother's pension. I would find out perhaps via the German Embassy who has authority
from the German Finance Ministryto give receipts for money received for repayment of pension benefits. Also you need your late mother's pension statement to see if she had a German pension number (equivalent to our SIN). That way at least the repayment of any pension funds (AFTER THE DATE OF HER DEATH),can be tracked and attributed to her account

I would HESITATE to send any funds to the German FINANCE MINISTRY by wire , because they don't give receipts, and if the money could end in some German treasury "void', you would have a hard time proving you paid the funds back.

BTW, this is interesting , since my mother (age 92) is still alive and is or was receiving a very small German pension that she is entitled to working during the WWII years in Germany for a German farmer. She is from the Ukraine and went there as a worker to earn extra money to send home.



> The reason for my concern is that my mother used to complain that the Germans would tell her she had to pay her German income taxes, which she did at her bank (I assume it was with a wire transfer), but *then they would not acknowledge that she made a payment.* I'm sure they actually got the money but apparently no one applied that as a payment to her taxes. I want to be sure that what I send is acknowledged as payment against this debt.


She shouldn't have to pay Canadian income taxes if she was paying German income taxes on her German pension (paid in Deutschmarks or Euros now) .
There is a treaty with Germany and Canada, otherwise it is considered double taxation. You need to contact CRA to determine how to recover any taxes paid on her German pension to Canada, if she already paid the taxes on the same income to Germany. Some paper work (foreign tax credit) may be in order to do that, but that way the Canadian gov't could refund over payment of her Canadian taxes to her estate or executor. 

*here is link with somebody raising the same question;
*


> I had reported my German pension in Canada and payed tax on halve of the German Pension.
> *I also filed in Germany “Anlage R” for 2005,2006,2007 and 2008, and had to pay 25% on halve of my German pension. I have been told by the Finanzamt Neubrandenburg that it is correct to file and pay taxes in both countries, but I should be credited the German paid taxes in Canada according to the “German/Canadian tax treaty section 23” to prevent double taxation.*
> 
> *Canada has a “foreign tax credit formula” which will pay back only a calculated amount of the German taxes I paid, providing I have taxes to pay in Canada. *
> ...





> * Q * But isn’t that double taxation if you have filed your income properly on the Canadian tax returns?
> 
> *A.* If you have been declaring your German Pension on your Canadian Tax Return there should be no taxes owing to Germany since you have paid tax on them to Canada — *but you still have to file the returns.*


read more on this issue here;
http://padgettcalgary.com/are-you-a-canadian-resident-receiving-a-german-pension/


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## AltaRed (Jun 8, 2009)

Joe Black said:


> I've never done an international wire transfer before. My question, how does this payment get attributed to the amount I owe to the pension department? I mean, from their perspective, some money shows up in their account one day - how do they know what it's for? Do I tell them beforehand "look for a payment from me this week" or some other communication?
> 
> The reason for my concern is that my mother used to complain that the Germans would tell her she had to pay her German income taxes, which she did at her bank (I assume it was with a wire transfer), but then they would not acknowledge that she made a payment. I'm sure they actually got the money but apparently no one applied that as a payment to her taxes. I want to be sure that what I send is acknowledged as payment against this debt.


I know of only 2 things that go part way to providing that assurrance, but neither are infallible. When you do the wire transfer, there is a box where one can put a 'note' to the recipient. Put in your mother's ID number in that box with a short description. Then follow up if you can with the contact person a week or so later to ask if the wire transfer was received.

I did something like this just a few days ago. We bought some art in Namibia that has to be shipped at our cost and so had to send an International wire transfer to a Windhoek bank. For the message part, I put in the invoice number and just today, I wrote the shipping company to say the wire transfer has been sent and to advise me when they have received the money in their account. I will advise here when that loop is closed (too optomistic?).


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## gardner (Feb 13, 2014)

I would have the funds drawn up as a bank draft in euros and staple that to a letter with the appropriate account numbers and so forth. And keep a photo copy of it all.


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## Joe Black (Aug 3, 2015)

Spudd said:


> Can't you contact whoever contacted you (did they give a phone number, email address, street address?) and ask them how this should work?


Yes, the letter has an address and telephone number (German), and an "info" email address. It actually states how it should work, i.e. either a wire transfer (they give 4 bank accounts with SWIFT, etc.) or to send them a "cheque" (which would be a bank draft for me, since I don't have a Euro chequing account). Either way, what I don't like is that basically the money goes from my account, and then I just have to trust that they acknowledge the debt is paid. I just don't trust either method because of the experiences my mother had. Although now that I'm going through the process, I think I have an understanding of what happened with her. I suspect she just went to her bank and gave them the SWIFT numbers to do a wire transfer and the bank followed her instructions, but neither she nor them thought about getting acknowledgement from the recipients. She was in a small northern community, I doubt that the staff in that small branch had much experience with this.

I thought a wire transfer would be better, as at least there is a traceable record of the money going directly into their account. With a bank draft I thought there would be issues like it getting lost, and that the only tracing I would get is that the bank can tell me if the recipient actually received the funds. It's also my understanding that banks gauge you with their foreign exchange rates and fees. I have seen recommendations at other financial forums saying that company's like CanadianForex were much better in their pricing.

However, I'm starting to think a bank draft might be the better choice. I assume on a bank draft there is some "reference" field I can fill in (I have an "insurance number" in the letter that I could use).


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## Joe Black (Aug 3, 2015)

Caverman - as I understand it, what you do is pay the German tax, and then that is applied as a credit on your Canadian taxes. There is an extra foreign tax credit form you have to fill in. I remember my mom relaying to me the instructions she got from the CRA how to do this. Her income was high enough (second tax bracket) that she would still owe something to CRA even with this credit.


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## Joe Black (Aug 3, 2015)

gardner said:


> I would have the funds drawn up as a bank draft in euros and staple that to a letter with the appropriate account numbers and so forth. And keep a photo copy of it all.


I'm starting to think that is the best option. I just want to be sure of which method is he best "proof", as the letter stated they will take legal action if the payment is not made.


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## carverman (Nov 8, 2010)

Joe Black said:


> I'm starting to think that is the best option. I just want to be sure of which method is he best "proof", as the l*etter stated they will take legal action if the payment is not made*.





> the letter has an address and telephone number (German), and an "info" email address. It actually states how it should work, i.e. either a wire transfer (they give 4 bank accounts with SWIFT, etc.) or to send them a *"cheque" (which would be a bank draft for me, since I don't have a Euro chequing account)*. Either way, what I don't like is that basically the money goes from my account, and then I just have to trust that they acknowledge the debt is paid.


 In this case, I would DEFINITELY take extra measures that the appropriate German finance ministry responsible for receiving tax payments is notified, and you have some assurance the payment was received by the correct German
taxation department with some confirmation it was received. 

On the second thought, sending bank draft may not be the best way as some Germany ministries *may not know *what to do with a Canadian bank draft drawn on a Canadian bank, even if it converted to Euros. 
And, it is still may cost you a heft bank processing fee. 
But at the same time, you want this taxation delema finished once and for all with this final payment. 

In your first post, you mentioned:


> Recently, the German government contacted me asking me to repay the overpayments, they are asking for around $1300 Euros. *I've set up an account with CanadianForex to make the payment via wire transfer.*


You said:


> I thought a wire transfer would be better, as at least there is a traceable record of the money going directly into their account.


From the website below:
CanadianForex will send you an* email confirmation *that the money transfer is complete. That should be sufficient proof.

*Make sure you print out the EMAIL confirmation from CanadianForex, and SAVE IT in case you ever get a letter again from a German ministry about your late mother's outstanding account with them.*

CanadianForex:


> You can track your transfer online.
> 
> We’ll also send you an SMS or
> 
> Email to confirm once it’s complete.


http://transfers.canadianforex.ca/m...gclsrc=aw.ds&dclid=CKP5_Ib0r9ACFU6DaQodRKIAcw


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## gardner (Feb 13, 2014)

carverman said:


> Germany ministries *may not know *what to do with a Canadian bank draft drawn on a Canadian bank, even if it converted to Euros.


I have never had trouble with a Euros bank draft issued by TD. There's never been any mystery to the banks on the receiving end. I think in the TD case, the cheque itself says it is issued by TD in London.

It would cost a bit, but you could send the whole thing double-registered, just to be 100% sure. At €1,300 this is not a huge risk, but if it were €100K or something, I would definitely double-register.


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## Joe Black (Aug 3, 2015)

I have decided to go with a bank draft, which I now have ready to send. I decided on this option since I will now have a receipt showing a cheque made out to exactly the beneficiary they specified in their letter, for the exact amount. If they cash it and later claim I didn't pay it, I think this would be more than sufficient proof to win any legal claims against me. If it never gets cashed, I was told there is a process (although rather long) to cancel the draft and receive the funds back.

One thing, the draft form they had did not have any type of "Reference" line where I could put the Insurance Number that I was going to use as a reference. There's an extra line in the "To:" area, so the teller suggested I write it there, but I'm afraid this might invalidate who the beneficiary of the draft should be. I'm wondering if I should write it anywhere or just leave the draft as is?


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