# RRSP withdrawal as an EXPAT



## forrory1 (Mar 1, 2015)

First I would like to introduce myself. I am a 28 year old male working in the aerospace field. I have been reading CMF for the better part of 3 years now. This forum has provided me with a valuable understanding of personal finance and wealth-building. Thanks for the years of informative reading.

I am posting tonight in a bit a desperation. As we all know RRSP season is here and over the years I have never contributed and thus accumulated about $40 000 worth of contribution room. I was following some advice about saving my contribution room for the first year I have high earnings.

2014 I earned $95 000 as employment income and also sold an investment/principle property.

In the next few years I anticipate leaving my job in Canada and looking for work in Europe/USA/Brazil. I hold dual citizenship, Canadian and European. I would renounce my Canadian residency.

My question is: If I contribute to my RRSP would I be able to withdraw the funds at a later date tax free (basic exemption) if i am no longer working in Canada/renounced residency effectively making my Canadian income is $0?

I have searched the CRA's website to no avail also have not been able to find an accountant familiar enough to provide me with an answer. Any help is greatly appreciated.

Regards,
forrory1


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## AltaRed (Jun 8, 2009)

No. There will be a withholding tax. Whether that withholding tax will be recoverable (as a foreign tax credit) in the country in which you then reside will depend on the tax treaty it has with Canada.

Added: The withholding tax rate is 25% but can be lower depending on any tax treaty.


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## forrory1 (Mar 1, 2015)

@AltaRed Thank you for the reply.

So I would be wise to wait and only withdraw from my RRSP when I happen to be working in a country with a tax treaty.

Also when considering how much to contribute this year, given these new facts, I could still come out "ahead" if I limit my contribution into RRSP at a higher tax rate than 25% withholding tax?

Regards,
forrory1


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## Guban (Jul 5, 2011)

You likely would come out ahead from a Canadian tax perspective as you would withdraw at a lower tax rate, but you should also consider how your RRSP withdraws would count for taxation in your new country of residence. Canada may not tax you at a high rate, but you may want to check out how foreign lump sum income it treated.


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## janus10 (Nov 7, 2013)

Look, if you're in aerospace you of all people should know it isn't exactly brain surgery.

http://www.youtube.com/watch?v=THNPmhBl-8I


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