Can I withdraw RRSP at any time

17-08-2019, 10:56 AM

Hello everybody,

my wife is Canadian and I am German (permanent resident for five years). We currently live in Ontario but will soon be in Germany for a couple of years.

We both have a Tax Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP).

The investment income from these accounts is tax-free.

My question: If we live in Germany and therefore also pay taxes there, do we have to pay tax on the investment income from these accounts in Germany?

So far nobody has been able to give me an answer to this question.

Many Thanks!

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Hi Mike,
First of all, welcome to the forum!

If you live in Germany, you have to pay tax on all of your (worldwide) income there. Since the introduction of the final withholding tax, there is no longer any obligation in Germany to declare correctly taxed investment income. Since the TSFA and RRSP income are tax-free under Canadian law, they are correctly taxed in Canada or legally flowed into the account. In my opinion, they should then also be tax-free in Germany.

Since I am not a tax advisor, this only represents my private opinion. If in doubt, you should contact a tax advisor in Germany.

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  • Conestogo
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Please make sure to clarify with Revenue Canada what you can do with the accounts and not as long as you have been living in Germany.
(Depositing, withdrawing, etc.) We had very big problems with it and had absurd back taxes on the table.
Higher than what we had deposited into the accounts. That was then all cleared up and set to zero. But it dragged on for 2.5 years. But every tax refund was held back in time and the reminders are not pleasant either.
In Canada, the interest on the tax debt does not stop if an objection is made. Funny sums can come together.
Our problem were the times when we had no residence permit and were in Europe. Not really complicated and we had the feeling "let's see if they don't pay"

So inquire what exactly needs to be done !!!!
The following 1 member says thank you to Conestogo for the contribution:1 member says thanks to Conestogo for this post
  • Joe

Thanks in advance for the information! I will definitely keep looking for a good tax advisor who is familiar with this. Unfortunately, it is quite difficult to get clear information on these topics.

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As a layman, I see it this way:
REER / RRSP is a private old-age provision, similar to the Riester pension in Germany - apart from state subsidies. Interest that the account pays off today is theoretical because it can expire again. You can only access the money at 65 and then have to pay tax on it.
CELI / TFSA works differently than the saver allowance, but the idea behind it is the same: A certain amount can be invested tax-free. Whoever is richer pays. In Canada the way it works is that you can invest $ 5,500 no matter how much interest you get on it. In Germany, the principle applies that you can have a certain investment income tax-free. My personal recommendation would be to indicate the interest income of the "tax-free savings account" with the German tax. If there is something left of the tax exemption because your German accounts do not yield much, the tax office will take this into account. In the meantime, the tax offices exchange data with their foreign equivalences. That must also have advantages for taxpayers.

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