Remittances, whether you’re sending money out of Canada or receiving funds from abroad, are not taxed as income or gifts in Canada. However, if the money comes from selling assets, you may owe capital gains tax.
You work hard for your money, and when you send it to family or receive support from abroad, the last thing you want is a surprise tax bill. The good news is, Canada doesn’t tax remittances as income or gifts. But, if you’re moving funds from selling property, stocks, or other investments, you might owe capital gains tax on the profit. That’s the catch: it’s not the remittance, it’s where the money comes from that matters.
What Is a Remittance?
A remittance is any money you send or receive across borders—think family support, gifts, or moving your own savings.
Are Gifts Taxed in Canada?
Canada doesn’t tax gifts you send or receive, unless the funds come from selling assets,
You can send or receive gifts without paying tax. If your remittance is a true gift, you’re in the clear. But if it’s from selling something valuable, you need to report the gain.
When Do You Owe Tax on Remittances?
- If the money is from your regular income, you must report that income on your tax return.
- If you sell property, stocks, or other investments, you may owe tax on the profit (capital gains).
- Gifts and family support are not taxed unless they’re tied to asset sales.
How About Sending Money Out of Canada?
Sending money from Canada isn’t taxed, but you must report any taxable income or gains that make up the transfer
What Happens If You Don’t Report?
If you don’t report taxable income or gains, you could face fines up to $5,000 or extra tax bills. Banks report large transactions, so the CRA will know if you try to hide taxable funds.
Legal Limits for Remittance Transfers In and Out of Canada
There’s no legal limit on how much money you can send or receive in Canada, but transfers over $10,000 must be reported by banks and money transfer services
You want to help your family, buy property, or invest abroad without red tape. Canada doesn’t cap how much you can move, but regulators keep an eye on large transfers to prevent crime.
How Much Can You Send or Receive?
There’s no maximum. You can transfer any amount, but expect questions if you’re moving large sums.
What Triggers Reporting?
Any transaction over $10,000 CAD, whether incoming or outgoing, is reported to FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada)
Do Small Transfers Get Reported?
No, only transactions over $10,000 or those flagged as suspicious.
Are There Limits on Frequency?
No. You can make multiple transfers, but each over $10,000 gets reported.
What If You Split Transfers?
If you try to avoid reporting by splitting transfers, banks may still flag and report them as suspicious.
Reporting Large Transfers to CRA (Canada Revenue Agency)
You don’t have to report large remittances to the CRA yourself, but banks and transfer services do. If the money is taxable, you must declare it on your tax return.
You want to stay on the right side of the law, but you don’t want paperwork headaches. Here’s the deal: banks and transfer companies handle reporting to FINTRAC, not you. But if you’re moving taxable income or gains, you must report that to the CRA.
Who Reports Large Transfers?
- Banks and transfer services report to FINTRAC, not the CRA.
- CRA gets notified if the money is taxable income or capital gains.
What If You Receive a Large Gift?
You don’t need to report it as income. But if it’s from selling an asset, report the gain.
What If You Don’t Report Taxable Transfers?
You could face fines or extra tax bills if you hide taxable income. Banks report large transactions, so the CRA will know if you try to avoid taxes.
What Should You Do If You’re Unsure?
Keep records and talk to a tax professional. It’s better safe than sorry.
AML (Anti-Money Laundering) Compliance for Remittance Providers
Remittance providers in Canada must follow strict anti-money laundering (AML) rules, including verifying customer identity and reporting large or suspicious transactions to FINTRAC
You want your money to arrive safely and quickly. AML rules protect you from fraud and financial crime. Providers must follow the rules or risk losing their license.
What Do Remittance Providers Have to Do?
- Verify your identity for large or suspicious transfers
- Keep detailed records of every transaction
- Report transactions over $10,000 CAD to FINTRAC
- Report any suspicious activity, even for smaller amounts
What Does This Mean for You?
You may need to show ID or answer questions for large transfers. This keeps your money safe and helps prevent crime.
What Happens If Rules Aren’t Followed?
Businesses face heavy fines or lose their license. Individuals could have transfers delayed or blocked.
What’s FINTRAC?
FINTRAC is Canada’s financial intelligence agency. It tracks large and suspicious transactions to prevent money laundering and terrorist financing.
What Triggers a Suspicious Transaction Report?
- Unusual patterns (many small transfers, or sudden large sums)
- Transfers to or from high-risk countries
- Incomplete or false information
Data Suggestion
Table:
| AML Requirement | Who Must Follow | What’s Involved |
|---|---|---|
| ID Verification | All providers | Passport, driver’s license |
| Record Keeping | All providers | 5 years minimum |
| Large Transaction Reporting | All providers | Over $10,000 CAD |
| Suspicious Activity Reporting | All providers | Any amount |
Key Takeaways
- Remittances aren’t taxed as income or gifts in Canada, but capital gains tax may apply if you sell assets.
- There’s no legal limit to how much you can send or receive, but banks must report transfers over $10,000 CAD to FINTRAC
- You don’t have to report large remittances to the CRA unless the money is taxable income or capital gains.
- Remittance providers must follow AML rules, including ID checks and reporting large or suspicious transactions.
Frequently Asked Questions
Are remittances taxed in Canada?
No, remittances aren’t taxed as income or gifts. Only money from selling assets may be taxed as capital gains
Is there a limit on how much money I can send or receive?
No, but transfers over $10,000 CAD are reported to FINTRAC by banks and transfer services.
Do I need to report large remittances to the CRA?
No, unless the money is taxable income or capital gains. Banks report large transfers to FINTRAC, not the CRA
What’s AML compliance?
AML (Anti-Money Laundering) compliance means remittance providers must check IDs, keep records, and report large or suspicious transactions to FINTRAC
Suggested Data
- World Bank data on annual remittance flows to and from Canada.
- FINTRAC annual reports on the number of large transactions reported.
- CRA statistics on capital gains tax filings related to remittances.
You want your money to move safely, quickly, and without surprises. By understanding the rules for remittances, limits, reporting, and AML compliance in Canada, you can send and receive funds confidently—knowing you’re playing by the book and protecting your hard-earned cash
