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Tax Implications for Overseas Earnings: An Informative Guide from ACE for Overseas Nepalese in Canada

Tax Implications for Overseas Earnings: An Informative Guide from ACE for Overseas Nepalese in Canada

03 Nov 2023

Imagine working hard in a foreign country, making a good salary, and giving money back to your family in Nepal. But then you might have to pay taxes on both the money you make abroad and the money you send home.

Overseas Nepalese who live in Canada often worry about this. But do not worry because many tax breaks can help you pay less in taxes.

In this helpful blog, ACE will tell you everything you need to know about telling the Canada Revenue Agency (CRA) about your income from abroad and paying taxes on it. You will get to see how taxes work when money transfer to Nepal.

So, this guide is for everyone, whether you have lived abroad or just moved there. Learn how to save the most money and pay the least taxes.

Earnings from Abroad and Taxes

Living and working abroad can be fun and challenging at the same time. As a Nepalese living in Canada, knowing how taxes work is one of the most essential parts of managing your money, along with how to send money to Nepal. Here are the considerably significant things you should understand:

  1. Residency Status: Figuring out your residency status is the first thing you need to do to understand your tax responsibilities in Canada. For tax reasons, are you a resident, non-resident, or "deemed resident"? Because of this difference, you will have to pay different kinds of taxes.
  2. Income Tax: If you live in Canada, you usually have to tell the Canada Revenue Agency (CRA) about your income, no matter where it comes from. This includes both pay from Canada and Nepal. But Canada has tax deals with many other countries, including Nepal, so they do not have to pay taxes twice. Use these deals so you do not have to pay taxes on the same income in both countries.
  3. Foreign Tax Credits: Residents of Canada who pay taxes on the same income in another country, like Nepal, can get a foreign tax credit from Canada. This can help you pay less in Canadian taxes.
  4. Reporting Requirements: Make sure you know all the reporting requirements, such as filing yearly tax returns in Canada and telling the government about any foreign assets worth more than a certain amount.

Plan your taxes by talking to a tax expert specialising in foreign taxation. They can help you set up your finances to pay the most minor taxes possible and take advantage of rebates and credits.


Managing Your Overseas Earnings

Once you know how the taxes will affect you, it is time to focus on how to best manage your money from overseas. Here are some ideas to think about:

  1. Open a bank account in Canada: Having a local bank account in Canada can make handling your money, paying your bills, and sending money to Nepal easier. Look for a bank with reasonable exchange rates and low fees for sending money internationally.
  2. Spend money wisely: It is vital to make a budget to keep track of your spending and save money for things like Instant money transfer or saving for the future. Many apps and tools for planning can help you keep track of your money.
  3. Spend with a plan: You should spend your savings so they can grow over time. There are many ways to invest in Canada, including bank accounts, GICs (Guaranteed Investment Certificates), stocks, and bonds. Diversify your finances to handle risk effectively.
  4. Plan for your retirement: Remember it. Canada has many ways to save for retirement, like Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). These can help you save for your old age and get tax breaks simultaneously.
  5. Send Money to Nepal: One of the most important things you can do with the money you make abroad is send it back home to Nepal. You want a safe, easy, affordable way to help your family and invest in your home country.

Ways to Send Money to Nepal

Instant money transfer to Nepal from Canada is easier than ever because there are many ways to do it. Consider the following methods to make sure your hard-earned money gets where it needs to go quickly and safely:


Bank Transfers

Transferring money through a bank is a safe way to send money to Nepal. But they can cost a lot because of high fees and alarming exchange rates. Find out what transfer services your bank offers by asking them.


Money Transfer Companies

Several companies specialise in sending money to other countries. They usually have better exchange rates than banks and charge less in fees. ACE Money Transfer, Western Union, MoneyGram, and Remitly are all popular choices.


Online Transfer Services:

Online transfer services like ACE Money Transfer and Wise (formerly TransferWise) are becoming more popular because they are open, have low costs, and use accurate exchange rates. They make it easy for you to send money from Canada to Nepal from your bank account in Canada.


Cryptocurrency Transfers:

Some tech-savvy people look into using cryptocurrency to send money across borders. Even though this is a new way of doing things, it may only be suitable for some because it is complicated and can change quickly.


Send Money with ACE Money Transfer

ACE Money Transfer is a top-notch choice for sending money to Nepal from Canada. With a reputation for reliability, efficiency, and competitive exchange rates, ACE Money Transfer ensures that your hard-earned funds reach your loved ones in Nepal swiftly and securely. Their user-friendly online platform and dedicated customer support make the process hassle-free, making them the preferred option for those seeking a trusted and convenient way to transfer money across borders. Choose ACE Money Transfer for a seamless and cost-effective remittance experience to Nepal.

The Way Forward

As an overseas Nepalese, living and working in Canada can be beneficial, but it also means taking care of your money. Understanding how taxes work, being smart about spending the money you earn abroad, and sending money to Nepal quickly are all critical parts of your financial journey.

By staying informed, making smart financial choices, and using your resources, you can get the most out of the money you earn abroad and ensure you and your family in Nepal have a stable financial future. Remember that talking to financial and tax experts can help you reach your financial goals.

In the end, money transfer to Nepal and handling money you earn abroad should be done with careful thought and careful planning. With the correct information and tools, you can confidently manage the complicated financial world and set yourself up for a better financial future.


1. What is my tax obligation as a Nepalese expat living in Canada?

As a resident of Canada, you are generally required to report your worldwide income to the Canada Revenue Agency (CRA). This includes income earned in both Canada and Nepal. However, tax treaties between Canada and Nepal exist to prevent double taxation.

2. How can I reduce my tax liability in Canada on my overseas earnings?

You can reduce your Canadian tax liability through foreign tax credits. These credits are available to residents who pay taxes on the same income in another country, such as Nepal.

3. What should I consider when managing my overseas earnings in Canada?

To manage your earnings effectively, consider opening a local bank account, creating a budget, investing strategically, planning for retirement, and exploring ways to send money to Nepal efficiently.

4. What are the options for sending money to Nepal from Canada?

Several options for sending money to Nepal include traditional bank transfers, money transfer companies like Western Union and MoneyGram, online transfer services like Wise, and even cryptocurrency transfers. Each option has its advantages and disadvantages in terms of cost and convenience.

5. How can I ensure my money reaches Nepal safely and at a reasonable cost?

To ensure your money reaches Nepal safely and cost-effectively, compare the fees and exchange rates offered by different remittance services. Online transfer services and specialised remittance companies often provide better rates and lower prices than traditional banks.


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