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Hello,
I am a Canadian citizen who moved to Japan, but only on a temporary spouse visa which gets approved for 1 or 3 years and has to be renewed each time. If my spouse passes away or divorces, I have to return to Canada.
Since it's not entirely a stable visa, I prefer to keep my bank accounts in Canada with just one Japanese bank for daily spending like food and other necessities.
The problem is this: one of these banks is one which earns interest.
Right now the address to the bank is my Mother's house who can recieve my mail and some of my belongings are there. I go back to Canada every year as well, so I keep a strong connection.
I file taxes in Canada every year for my own personal record as a citizen - and report the interest income earned from the bank. The CRA knows I am living in Japan primarily. I tend to file as a non resident.
I earn no other income either in Canada nor Japan (my spouse and their family take care of my expenses and I am the homemaker) so I don't file taxes in Japan.
I have kept in close contact with CRA and they always assure me I don't need to pay tax3/ on the interest earned (it is very small, ranging from $300 a year to 1800$ a year - and this is under Japan's 200,000yen threshold) but even so, I get nervous there's something amiss or I'm making a mistake.
Is the advice given by CRA regarding my situation accurate? Would it be reccomended to close the Canadian banks?
In earnest, I dwant to avoid closing my home banks. If an an emergency occurred and I had to leave Japan, the process to close a Japanese bank can take some time, and I wouldn't have any Canadian bank to return my money to.
What do you advise? Thank you in advance!
Hi Sylvia,
Thank you for reaching out and providing the detailed background. I’ll address your concerns step by step.
1. Non-Resident Status and Canadian Bank Interest
As a non-resident of Canada, the only Canadian tax you may owe on Canadian-source income is typically withholding tax. For interest income earned from Canadian banks:
- Most Canadian bank deposit interest is exempt from non-resident withholding tax (ITA, paragraph 212(1)(b), with exceptions for “participating debt interest”).
- This means that the interest you earn on regular savings or GIC accounts from Canadian banks is not taxable in Canada if you are a non-resident, even though the bank may issue a T5 slip.
So the advice you’ve received from CRA—that you don’t need to pay Canadian tax on this interest—is correct.
2. Japan Tax Considerations
Japan generally taxes residents on their worldwide income. However:
- As you noted, Japan has a 200,000 yen de minimis rule for foreign passive income reporting, which you’re under.
- Since you don’t have Japanese employment income and your spouse covers your expenses, it sounds like you’re below the reporting threshold. Still, if your situation changes, it would be wise to confirm with a Japanese tax professional.
3. Filing Canadian Returns as a Non-Resident
If you are a non-resident and have only bank interest (which is exempt from withholding tax), you’re not required to file a Canadian return. However, filing voluntarily to keep your tax record clean is not harmful—though technically unnecessary.
4. Keeping vs. Closing Canadian Bank Accounts
There’s no requirement to close your Canadian accounts. In fact, keeping them can be practical for the reasons you mentioned:
- Emergency access to funds if you return to Canada.
- Ease of moving money internationally.
- Stability in case your Japanese visa status changes.
Many non-residents keep Canadian bank accounts with no tax issue.
✅ Recommendation:
- You may continue to keep your Canadian bank accounts open.
- No Canadian tax is payable on the bank interest you described.
- Continue monitoring Japanese rules, especially if your annual foreign-source income grows above the 200,000 yen threshold.
- Filing Canadian tax returns is optional given your circumstances, but not harmful if you wish to continue.