Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

Tax guidelines and regulations for large money transfers into Canada

Failing to file could leave you on the hook for penalty fines — or jail time.

While our friendly neighbor to the north won’t require any forms from your recipient, you may have to file with the IRS if you send more than $10,000 out of the US.

How Canada regulates large remittances

Canada does not regulate or tax most gifts of cash sent into the country. In short, citizens can receive as much cash as they’d like without triggering a gift or capital gains tax. Because of this, your recipient shouldn’t have to deal with cumbersome legal documents after they’ve accepted your remittance.

Exceptions come into play when that cash is in the form of property, company shares, designated stock or other securities. In that case, your gift may be subject to 50% capital gains tax, depending on the circumstances of your transfer.

Deleted:

Send money to Canada with XE

XE has fast transfers with low fees and a range of foreign currency tools.

  • Send money to 130+ countries
  • Competitive exchange rates that are often better than banks'
  • Low transfer fees
Promoted

What are the penalties in Canada if my recipient fails to file?

If your recipient doesn’t list the transfer on their income taxes, they could be charged with tax evasion in Canada. If they can prove that the failure to list the transfer was accidental, they’ll have to pay any taxes due, along with a penalty. If the failure to file was intentional, they can be criminally charged.

Do I have to report large transfers out of the US?

Any transfer over $10,000 needs to be reported to the US government, but that responsibility generally falls on banks and money transfer companies. However, if you’re sending more than $15,000 as a gift or more than $10,000 as a business transaction, or if you have a foreign bank account that’s held more than $10,000 at any point in the past year, you’ll need to notify the IRS.

Sending a lot of money out of the country? Know what the IRS expects of you.

How much money can I send to Canada?

As much as you want — there isn’t a legal limit on the amount you can send. But some transfer providers impose their own caps, so use a no-limit provider like XE if you’re planning a large transfer.

How will my recipient in Canada get the money?

Depending on the provider, your options for delivering money to your loved ones include bank-to-bank transfers, cash pickups and deposits to mobile wallets.

To pick up your transfer in person, your recipient may need to provide a picture ID or a confirmation number to receive your funds. If they own an account with a Canadian bank or money transfer company, they may not be required to provide this information each time you send money.

How to send money to Canada

Compare providers for your next large transfer to Canada

Our table lets you compare the services you can use to send money abroad. Compare services on transfer speeds and fees, then click Go to site when you're ready to send.
Name Product Filter Values Fastest Transfer Speed Fees (Pay by Bank Transfer) Learn More
OFX
24 hours
$0

View details
OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.
Dunbridge Financial
Dunbridge Financial
24 hours
$0

View details
Dunbridge Financial offers competitive exchange rates and zero fees on transfers to more than 120 countries.
CurrencyTransfer
24 hours
$0
SPECIAL OFFER ✓ Minimum transfer of $1,000 for Finder readers (normally £5,000)

View details
Exclusive: Minimum transfer of $1,000 for Finder readers (normally $5,000).
CurrencyTransfer lets you shop around for the best exchange rate on its online marketplace.
XE
Within minutes
$3

View details
XE has fast transfers with low fees and a range of foreign currency tools.
Wise (TransferWise)
Within an hour
From $2.26

View details
Wise uses the mid-market rate and transparent fees to help you send money in 45+ currencies.
loading

Compare up to 4 providers

Bottom line

Canada’s lack of a gift tax makes it easy to transfer money to an acquaintance or loved one there. While your recipient won’t have to worry about any forms, transfers over $10,000 may need to be reported to the IRS.

As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.

Frequently asked questions

More guides on Finder

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.

24 Responses

    Default Gravatar
    SunnyHilMay 4, 2019

    I’m a USA citizen who owns a home in Canada. I’m also a permanent resident of Canada. I’ve been retired since 2017. I’m selling my home in canada and need to move some of the proceeds to the USA. What are the tax implications?

      Avatarfinder Customer Care
      BellaMay 5, 2019Staff

      Hi SunnyHil,

      Thanks for your inquiry.

      Generally, any transfer over $10,000 needs to be reported to the US government, banks and money transfer companies are responsible to report all the cash transactions. However, if you’re sending more than $15,000 as a gift or more than $10,000 as a business transaction, or if you have a foreign bank account that’s held more than $10,000 at any point in the past year, you’ll need to notify the IRS. To know more information, it would be a good idea to check with the IRS and know more about which form you should use and how to go about reporting your transaction.

      I hope this helps.

      Kind regards,
      Bella

    Default Gravatar
    FerFebruary 21, 2019

    Hello!

    My father passed away in Mexico and we are going to sell his house I will receive a transfer. Will I pay taxes for this?

      Avatarfinder Customer Care
      JoshuaFebruary 23, 2019Staff

      Hi Fer,

      Thanks for getting in touch with Finder. I hope all is well with you. :)

      If you’re going to receive the money in Canada, you will most likely don’t have to pay taxes or file legal documents. However, since you are selling a property in Mexico, there might be some tax you need to pay in that country.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

    Default Gravatar
    PrashantSeptember 20, 2018

    I am in India and my son is studying in Canada. I want to send his tution fees as well as his living expenses to his bank account in Canada. Will there be any tax implication on my son, if he receives all this money in his account? Is there a limit to which he can receive money in his account?

      Avatarfinder Customer Care
      JoshuaSeptember 24, 2018Staff

      Hi Prashant,

      Thanks for getting in touch with finder. I hope all is well with you. :)

      Generally, there won’t be any tax implication on your son when you send money to Canada. However, you may also want to check with the tax law of India if there is any tax implication for your transfer.

      Regarding the limit, that would depend on the money transfer company you use if they have put some limits on how much you can send. The limit would also depend on the type of savings account of your son. For this reason, it would be a good idea to directly get in touch with your service provider and the receiving bank.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

    Default Gravatar
    ExPatJuly 7, 2018

    I’m considering moving money out of the states to a savings account in Canada. The money has already been taxed and is my personal savings. The amount is between 30 and 50K. What are the ramifications of doing this? Will there be a problem if I decide to return the money to the US?

      Avatarfinder Customer Care
      JoshuaJuly 23, 2018Staff

      Hi ExPat,

      Thanks for getting in touch with finder. I hope all is well with you. :)

      You need to report large sums out of money when moving it out of the US.

      Those who fail to report can expect fines of up to 5% of the asset value involved or $10,000 a year for up to six years. For those who wait until an investigation is launched, the penalty increases to up to 50 percent or $100,000 — whichever is greater. That amount can be applied to every year you fail to report for up to six years. You could also face criminal charges and up to 10 years in prison.

      For extra peace of mind, work with a professional or reputable transfer company to ensure your compliance in all areas. I highly recommend you read more about how to move your money out of the country legally.

      If ever you decide to return the money to the US, the same law applies. You need to report the transaction to the authority.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

    Default Gravatar
    AnkitJune 23, 2018

    Hi i want to send 20,000$ CAD to India which is the best way and will i be charged any Tax?

      Avatarfinder Customer Care
      nikkiangcoJune 24, 2018Staff

      Hi Ankit,

      Thanks for your message.

      Canada does not regulate or tax most gifts of cash sent into the country. In short, citizens can receive as much cash as they’d like without triggering a gift or capital gains tax. Because of this, your recipient shouldn’t have to deal with cumbersome legal documents after they’ve accepted your remittance.

      Kindly note that we’re a product comparison website and we don’t represent any company we feature on our site. You may choose from the providers stated above. You may consider transfer fees and shortest transfer time when choosing your money transfer facility.

      Hope this clarifies.

      Regards,
      Nikki

Go to site