4 minutes ago, JimGant said:

Of course! You're beginning to overthink this situation, as it is one of the non gray areas. Sadly, not more are such.

 

I agree in part -BUT I disagree with your 'overthink' characterisation. 

 

Rather I am trying to head off any misinformation - and show yet again another example of proof that such Canadian sourced pension is not only not taxable by Thailand for resident expats in Thailand - and FURTHER prove it is not to be used as part of a monetary assessment if a Thai tax return is required and also not included in a Thai tax form as income (if one needs to file such a return for other reasons).

On 10/20/2024 at 9:19 PM, oldcpu said:

Further to the above, I've been trying to decipher the Capital Gains section of the Thailand/Canada DTA.  Its very easy to get confused when they refer to 'contracting state' and 'other contracting state' if they do not specify in the same sub-paragraph in which state one is a resident.

 

With regards to disposition of capital gains (where I am specifically thinking of the sale of stocks, and mutual funds (including ETFs) , I read in an RBC document that there is likely no withholding tax.   However when I read the Thai/Canada DTA, I note [where I inserted "Thailand" and "Canada" in the text to help me understand this better as a resident of Thailand😞

 

 

... which suggests to me that even if no withholding tax on the capital gains, one may still need to pay tax to Canada on the capital gains.  I can't find wording in the Thai/Canada DTA that states Thailand can tax the Canadian capital gain - but I could be reading the DTA wrong.

 

What I interpreted out of the DTA contradicts some of what I read (and posted) in the post prior to this post about Capital Gains (from stocks and Mutual funds) in Canada. ... ie I believe they are still taxed in Canada - only there may be no initial withholding tax in some cases.

 

I have done a lot more research into this mostly out of curiousity.

 

Reading the Canada-Thaliand Double Tax agreement, and spending more effort to understand, I have come to the conclusion that for a Canadian who is a tax resident of Thailand, and not a tax resident of Canada, who still has a Canadian brokerage (such as Questrade) that capital gains on stocks bought via that brokerage are mostly (but not all) not taxable in Canada per the Canada-Thai DTA.  

 

As to which are taxable by Canada and which are not, comes down to the definition of immovable property, where Canada can tax Canadian shares/stocks (of a non-resident to Canada) where capitals gains were made in a Canadian brokerage on companies mostly involved in immovable property, but Canada can not tax shares/stocks where capital gains (made in a Canadian brokerage) which were made on companies not involved in immovable property.   Most companies listed in a stock exchange involve 'moveable' property. (moveable property referring to stocks such as Bank Stocks, companies that make sell/equipment , services ... )

 

I hope to post more (with pointers to specific articles, paragraphs, and subparagraphs in the Canada - Thai DTA) in  the subsequent days. 

 

I spent some time researching this, but i am no tax advisor, so take anything I conclude on this with a 'grain of salt'.   It may be a day or so before I follow this up with the specific references in the DTA (together with an explanation).

 

I found it all quite complicated and it took me a while before I came to my current level of what I hope to be a correct understanding.

 

duplicate post

6 hours ago, oldcpu said:

I hope to post more (with pointers to specific articles, paragraphs, and subparagraphs in the Canada - Thai DTA) in  the subsequent days. 

 

I spent some time researching this, but i am no tax advisor, so take anything I conclude on this with a 'grain of salt'.   It may be a day or so before I follow this up with the specific references in the DTA (together with an explanation).

 

 

Here is my current understanding in regards to the Canada-Thailand tax treat, when it comes to Canadian expatriates who are Thailand tax residents and who are not Canadian tax residents, and who still managed to retain a Canadian brokerage account where they can trade equities.  I looked at tis ONLY from the perspective of selling shares in a company in a Canadian brokerage.  Again, please note I am no tax advisor, so take my interpretation of this with a 'grain of salt' and verify your self.

 

- - - -

Capital Gains Taxation Under the Canada-Thailand Tax Treaty

 

Article 13 of the Canada-Thailand Double Tax Agreement (DTA) governs Canada’s right to tax capital gains for Canadian expatriates in Thailand who are tax residents of Thailand but not tax residents of Canada and who maintain a Canadian brokerage account.

 

Key Takeaway:

 

If you have resided in Thailand for more than six years and have not been a Canadian tax resident at any time during those six years, Canada generally cannot tax capital gains from the sale of shares held in a Canadian brokerage account, unless an exception under Article 13 applies.

 

Article 13 Breakdown:

Article 13(1) – Applies to gains from immovable property (e.g., real estate) in Canada. It does not cover typical publicly traded stocks.

Article 13(2) – Covers taxation of business assets (movable property forming part of a permanent establishment or fixed base). If you have no business operations in Canada nor Thailand involving such assets, this rule does not apply for personal tax reporting.

Article 13(3) – Addresses gains from ships/aircraft in international traffic. This is not applicable to typical expatriates.

Article 13(4)(a) – Grants Canada taxing rights over shares of companies whose value is principally derived from Canadian real estate (e.g., certain REITs). Most ordinary stocks are excluded.

Article 13(4)(b) – Similar to 13(4)(a), but it is for an individual's interests in partnerships/trusts holding Canadian real estate. This is rarely applicable.

Article 13(5) – Default rule: Capital gains are taxable only in Thailand, unless an exception (Articles 13(1)-(4)) applies.

Article 13(6) – Six-year lookback rule: Canada may tax capital gains if the seller was a Canadian tax resident at any time in the six years before the sale.

After six full years of Thai residency, Canada loses taxing rights under the DTA.

 

Critical Caveat: Departure Tax

 

While the DTA limits Canada's post-emigration taxing rights, Canadian domestic law imposes a 'departure tax' when you cease residency in Canada. This deems a sale of most worldwide assets (e.g., stocks, ETFs) at fair market value, triggering immediate capital gains tax in Canada — even if future gains on those assets later fall under Thailand's exclusive taxation under the DTA.

 

The exceptions to departure tax are: Canadian real estate, RRSPs/RRIFs, and certain other assets are excluded from deemed disposition.

 

I have been continuing me examination of the Canada-Thailand Double Tax Agreement (DTA) trying to understand some of the 'ins-and-outs' in regards to a Canadian expatriate living full time in Thailand.

 

For Canadian expatriates, who are living in Thailand, and who are Thailand tax residents, and who are not Canada tax residents, but for whom there may be a requirement or consideration to file a Canadian income tax return, I note the following is from my research. Please note that I am not a tax advisor, so take this with a grain of salt and apply your own judgement here, as I could be wrong:

 

= = =

 

Canadian Tax Filing for Non-Resident Canadians in Thailand in regards to Canadian derived Capital Gains

 

A Canadian expatriate living in Thailand who is a tax resident of Thailand and not a tax resident of Canada, but who maintains a Canadian brokerage account, may still be required to file a Canadian tax return. This typically occurs when they receive Canadian-source income, such as Old Age Security (OAS), Canada Pension Plan (CPP) payments, or RRSP/RRIF withdrawals.

 

Although Canada does not tax a non-resident’s global income, if a Canadian tax return (T1) is required, the CRA typically asks that Schedule A (Information About Your World Income) be completed. This allows CRA to determine the correct tax rate to apply on the Canadian-source income being reported).

 

Capital Gains from a Canadian Brokerage Account

 

For a Canadian, even as a non-resident to Canada, Canadian brokerages are required to issue a T5008 slip to the CRA when securities are sold. However, for Canadian individuals who have been non-residents of Canada for more than six consecutive years, capital gains from the sale of most publicly traded shares are generally not taxable in Canada. This is due to Article 13(6) of the Canada–Thailand Tax Treaty, which allows Canada to tax such gains only if the individual was a Canadian tax resident at any time in the six years prior to the sale.

 

If the person has not been a Canadian resident at any time in the past six years, then under Article 13(5), Thailand has the exclusive right to tax these capital gains — and Canada has no taxing rights on those gains from typical securities.

 

If a Canadian tax return is being filed for other reasons (such as to report Old Age Security (OAS), Canada Pension Plan (CPP) payments, or RRSP/RRIF withdrawal incomes), it is often a good practice to:

• Report the capital gain on Schedule 3 (Capital Gains or Losses) in the Canadian tax return;
• Ensure the capital gain is included in the world wide income reported on Schedule A of the Canadian tax return
• Claim a matching deduction on Line 25600  (Additional deductions) of the T1 main Canadian tax return form,   if applicable (for example if a non-resident to Canada for more than 6 years), referencing that the gain is exempt from Canadian tax under Article 13(5) and 13(6) of the Canada–Thailand Tax Treaty;
• And include a brief, one-page explanatory letter with the tax return submission to the CRA, outlining the treaty position and confirming that the expatriate individual has not been a Canadian resident during the six-year lookback period.

Again, this is my opinion, and I believe this helps ensure clarity and minimizes the risk of CRA inquiries, especially since T5008 slips are automatically reported. 

 

Once again, please note that I am not a tax advisor, so take this with a grain of salt and apply your own judgement here as to whether you believe necessary to file a Canadian tax return, or whether to include any Canadian sourced stock capital gains on any such Canadian tax return, or whether you have other ways to approach the tax reporting.

Further to the Canada-Thailand Double Tax agreement, here are some outputs of my research into this in regards to dividends from a Canadian company via a Canadian brokerage, received by a Canadian expatriate in Thailand, who is a Thailand tax resident and who is not a Canadian tax resident.

 

Please note, I am not a tax advisor. Take this with a 'grain of salt' and apply your own interpretation. This is from my own notes to support my own private assessment.

 

= = =

Canadian Dividends for Canadian Expats in Thailand – My Personal Interpretation of Canadian taxation aspects in considering the Canadian-Thailand Double Tax Agreement (DTA)

 

For Canadian expatriates living in Thailand who are tax residents of Thailand  but no longer Canadian tax residents, and who still have a Canadian brokerage account paying dividends (stocks, ETFs, mutual funds), here is my interpretation of the Canada-Thailand Double Tax Agreement (DTA) regarding how those dividends are treated for Canadian tax purposes.

 

Withholding Tax – 15% Under the Tax Treaty

 

Under Article 10(2) of the Canada–Thailand Tax Treaty:

• Canadian dividends paid to a Thai tax resident (who is the beneficial owner) are subject to a maximum 15% Canadian withholding tax.
• A Canadian brokerage should generally withhold this 15% automatically — so in most cases, a Canadian expatriate in Thailand require no further Canadian tax filing unless they are filing a Canadian tax return for other reasons (e.g., receiving OAS, CPP, RRSP/RRIF payments).

If Also Filing a Canadian T1 Return (e.g., for OAS, CPP, RRSP/RRIF)

 

If a Canadian expatriate in Thailand (not a Canadian tax resident) is required to file a Canadian tax return for other reasons, (for example, because they are receiving Canadian pension income) then here are two approaches I believe could be adopted when filing where both require Schedule-A to be completed:

 

Schedule A – Statement of World Income

 

If filing a Canadian tax return, one must report all worldwide income, including Canadian dividends, on Schedule A. The CRA uses this worldwide income to calculate the appropriate tax rates on the person's Canadian income. Hence, Schedule A must include Canadian dividend income, even though it’s already been taxed at source.

 

Canadian T1 Main Tax Form - Two different approaches to consider:

 

as noted I believe there are two possible approaches ...

 

Approach One – Do not include dividends on Lines 12000 / 12010 / 12100 (Dividend Income) of Canadian Tax Return T1 form

 

I believe it is may not be strictly necessary to enter Canadian dividends on these lines if they’ve already been taxed and are reported on Schedule A. However I also believe in such cases, it is best to attach a note stating:

“Dividend income has been reported and taxed at the maximum 15% in accordance with Article 10(2) of the Canada–Thailand Tax Treaty, and thus has not been included on this T1 tax form. This taxpayer is a resident of Thailand and the beneficial owner of the income.”

 

Approach Two – Include dividends on Lines 12000 / 12010 / 12100 of Canadian Tax Return T1 form

 

If one includes dividends on one of the noted income lines, I believe one should also claim a matching deduction on Line 25600 (Additional Deductions), citing Article 10(2) of the Canada–Thailand DTA. This reflects that the income is treaty-exempt beyond the 15% withholding already applied. In this case, one might attach a note stating:

“Dividend income has already been taxed at the maximum 15% withholding in accordance with Article 10(2) of the Canada–Thailand Tax Treaty. This taxpayer is a resident of Thailand and the beneficial owner of the income.”

 

Why attach an explanation note or letter?

 

Adding a brief note or letter may help clarify one's treaty position for the CRA. This may reduce the likelihood of inquiries, especially since the CRA likely received a NR4 or T5 or T5008 slip from one's financial institution reporting the dividends.

...

and again, I am not a tax advisor. I did this research for mine OWN benefit, and I am simply sharing this. If you are looking for tax advice, you may be best going to a professional tax advisor.

 

I spent a lot of time looking at the Canada-Thailand DTA and also at Canada tax law to understand my Canadian tax obligations.

 

In this post I am trying to summarize some of what I learned and believe in regards to some of the Canadian tax obligations to Canadians who are tax residents of Thailand - and MOST IMPORTANTLY (in the capital gains case) who have not been a Canadian tax resident for over 6 years.

 

I am looking at this from a Thailand LTR-WP Visa holder (Thailand tax resident) perspective where foreign (non-Thailand) income is not taxable in Thailand for such Thailand visa holders.  I have also written this from the perspective of a Canadian who is not filing a Canadian tax a return under section 217 of the Canadian tax return but who is still filing a Canadian tax return as a non-resident to Canada (due to having significant Canadian income).

 

In terms of different Canadian Income sources and Canadian tax obligations for a non-Canadian resident ( > 6 years) who is resident in Thailand (and not filing a Canadian tax a return under section 217 of the Canadian tax return) I note the following:
.
Canadian Pensions (CPP, OAS, RRSP/RRIF income, other Canadian pensions). If a 25% withholding tax is applied in Canada, before the income is provided to one's bank account, I suspect that might be the maxiumum those pensions can be taxed by Canada (note OAS is a bit of an exception as OAS can be 'clawed' back). References for this on pensions are Article 18(1) of the Canada–Thailand Double Tax Agreement (DTA) (1989) which grants Canada the exclusive right to tax pensions, and Subsection 212(1)(q) of the Canadian Income Tax Act which imposes non-resident withholding tax on these payments at a rate of 25% - where I believe that this represents the final Canadian tax obligation on these payments (if one is not filing a Canadian tax return under Canada tax section-217). Accordingly thou to ensure one is not taxed at an inappropriately high rate, the Canadian tax form needs to be VERY carefully filled in to reflect this.
.
Canadian Interest (from Banks). Canadian bank interest income is not subject to Canadian tax under Part XIII of the Canadian Income Tax Act (which governs withholding tax for non-residents), provided the recipient is a non-resident of Canada and provided the interest is paid from an arm’s-length Canadian payer. Under ITA subsection 212(1)(b) and Regulation 805(1)(c), most interest income paid to non-residents of Canada is exempt from Canadian withholding tax unless it is from a business carried on in Canada or is a “participating debt obligation.” Again, to ensure one is not taxed at an inappropriately high rate, the Canadian tax form needs to be VERY carefully filled in to reflect this.  
.
Dividend Income from Stocks and ETFs ... My understanding is article 21(1) of the Canada–Thailand Double Tax Agreement (DTA) limits Canadian withholding tax on dividends to 15%. Subsection 212(1)(b) of the Income Tax Act governs the imposition of non-resident withholding tax on such dividends. Since the withholding tax has been applied at the Thailand-Canada DTA treaty rate, I believe that should constitute the final Canadian tax obligation on these payments. Again, to ensure one is not taxed at an inappropriately high rate, the Canadian tax form needs to be VERY carefully filled in to reflect this.
.
Capital Gains (on stocks/ETFs).  My understanding is Article 13(5) of the Canada–Thailand Double Tax Agreement (DTA) grants Thailand exclusive taxing rights over capital gains — except for those related to immovable property or specific corporate interests. In general this applies to most (not all) Canadian securities (publicly traded stocks and ETFs) and they fall under this not taxable in Canada category. I believe this is consistent with Section 2(3) of the Canadian Income Tax Act and in accordance with the Canada-Thailand DTA.  Again, to ensure one is not taxed at an inappropriately high rate, the Canadian tax form needs to be VERY carefully filled in to reflect this. 

 

I am NOT a tax advisor. I may not (yet) have this 100% correct.

 

So take the above with lots of salt.

 

I hope to apply the above when in April-2026 I file my year 2025 Canadian tax return.  Assuming I do, then I will learn then Revenue Canada's interpretation. I do plan to list ALL the income in my Canadian tax return, but then if already taxed via a withholding tax I will look for an appropriate place on the Canadian tax form to deduct it (likely line 25600 - but ONLY with an accompanying letter providing the justification, where in that letter points to specific clauses in the Canada-Thailand DTA and also to clauses in the Canada Income Tax Act).
 

 

@shady4lyfe @oldcpu

Great post thank you for your invites and being part of the solution in this community 

Much appreciated 🙏 

I am still pondering the approach to take in submitting my 2025 tax return.

My original idea was to report my OAS, CPP, RRIF income, interest, dividends, and capital gains (if any)) on the non-resident T1 form, and then turn around deducting the same on a different line on the T1 form. However i received feed back from a source who noted if i do that, Revenue Canada may mistakenly complete their assessment of my tax return form as if i am electing under section-217. (even thou I will provide a letter saying I am not filing under section-217).

Filing under section-217 would cost me a LOT of money due to my large global income outside of Canada (and outside Thailand).

I note I have paid withholding tax on OAS, CPP, and RRIF income. And possibly paid withholding tax on Dividends. My tax obligations for those thus may already have been met.

And given Canadian interest and Canadian capital gains may be excluded Canadian tax (since I am a non-resident of Canada , with applicable clauses in the Thai-Canada Double Tax agreement being relevant), I may adopt a different approach.

In the different approach I would write a cover letter and note I already paid withholding tax on my OAS, CPP, RRIF and dividends and note I believe that satisfies my tax obligation for those incomes (referencing the specific sections in the Canadian Tax act and the Thai-Canada-DTA). For the interest and Capital Gains, I would also note the specific sections in the Canadian tax act and Canada-Thai DTA which notes they are applicable for Thailand to tax and not Canada to tax (I have to confirm this yet re; interest)). I would thou list all of those incomes on Revenue Canada tax return Schedule-A (World Wide income) and also in the OASIR tax returns - so I would still be giving full disclosure to Revenue Canada. They would know of all my income so there would be full disclosure.

I have not yet decided which approach (ie either (1) report all income on the T1, Schedule-A and OASIR, and then deduct same income on the T1, ... or (2) not report the income on the T1 (with a covering letter explaining why and only put all income on the Schedule-A/OASIR). Likely I won't file my Canadian tax return until close to end April, as I have major global travel planned all March and most of April. So I have time to ponder this.