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Posting Policy-Out of Canada (OUTCAN) [MERGED]

I didn't want to start a new thread, so I decided to add here. 

With my OUTCAN posting, the CF will deposit my pay and allowances into my Cdn bank account, while I need to maintain an Australian bank account for TD and claims.  Hopefully someone here with OUTCAN experience in Australia can help with ideas on how to transfer $ from my Canadian to Australian accounts without getting totally gouged by the banks/exchanges? 

Thanks!
 
That sounds odd.  I have been OUTCAN in the UK (95-98) and in the US (09-10), and both times my pay was deposited in my local (ie Brit or Merican) account.
 
PPCLI Guy said:
That sounds odd.  I have been OUTCAN in the UK (95-98) and in the US (09-10), and both times my pay was deposited in my local (ie Brit or Merican) account.

I was thinking the same thing, but checked on the VCDS/OUTCAN website and sure enough they say that pay is normal for small OUTCANs.  I would suggest finding out how often you get to put in claims for exchange rate fees.
 
AmmoTech90 said:
I was thinking the same thing, but checked on the VCDS/OUTCAN website and sure enough they say that pay is normal for small OUTCANs.  I would suggest finding out how often you get to put in claims for exchange rate fees.

Hmm, I must have missed that in my reading.  I wonder why that is the case.

OK then; on an OUTCAN HHT, since you'd be just starting up your account in the host country and wire transfers take a week or so to clear, how have people put down security deposits/bonds while in the HHT timeframe?  A bunch of traveller's checks?  A bag o'money?  ???
 
You might have this already.
http://www.outcan.forces.gc.ca/sites/page-eng.asp?page=6894
Aus is administered by MFSS
http://www.vcds-vcemd.forces.gc.ca/sites/page-eng.asp?page=8539
Cpl Rioux would appear to be your clerk.
http://www.vcds-vcemd.forces.gc.ca/sites/page-eng.asp?page=8543

They should have some answers.
 
Here's the answer, buried in the FAQ.  The expense to you is rolled into one of the allowances, Post Living Allowance.

Post Living Allowance (PLA):  PLA assists the member at post if the cost of living exceeds that of the NCR – basically a form of Post Living Differential, but applicable to OUTCAN postings.  It applies to a member who is posted, attach posted or attached posted (temporary) to a place of duty outside Canada, including each member of a service couple. It varies according to your pay level.  A mbr receiving PLA is not entitled to Separation Expense.

What it covers:  PLA compensates for the higher costs of purchasing goods and services at the post (ex:  internet/satellite/cable installation/services, groceries, gas, local banking (Rate Of Exchange losses/transfer fees), clothing, restaurants, extraordinary postal rates above and beyond proscribed rates for mailing/shipping, etc):  generally any cost of living expenses higher than Ottawa and based on the Post Index for that position.

Further details at:  http://hr.ottawa-hull.mil.ca/dgcb/cbi/pdf/CBI_10_Sec_15.pdf

Edit: A link that works: http://www.njc-cnm.gc.ca/directive/index.php?sid=16&hl=1&lang=eng#tc-tm_1_3
 
Dimsum,

Sorry I should have mentioned in my PM that one of the things considered in the PLA is the exchange rate. 

When I first got Down Under I asked about having my pay sent to my Aussie account. MFSS responded that there was no way of setting up a foreign payment in PeopleSoft (or HRMS or whatever the pay system is called these days), had I known that people in the States and the UK could do it I would have pushed harder. Being paid to your Aussie account would make life much easier.

In the end don't worry too much about the cost of the foreign exchange, through the company I mentioned to you, I lose about an extra 1.5 cents over the bank rate, not too bad. Plus with the amount of money you make on Foreign Service, PLA and PSA, you won't even notice it. After getting used to these allowances, I don't know how I'm going to afford to live back in Canada!!  :'(

Cheers
 
Thanks Inverted for all the info on here and elsewhere.  I'll definitely push through the clerks at MFSS. 

I just learned about the US, UK and SHAPE HQ allotments over xmas break when I was visiting Colorado Springs.  Bit of a surprise to me too.
 
If you have two credit cards, you could set up two paypal accounts, one Canadian, one AUS. It will allow you to quickly transfer funds from one to another, and the rates weren't that much different from the banks.

 
On my HHT - the CF SOR down here cut us cheques for the security deposit and first months rent.  I immediately deposited them in my new US bank account and wrote cheques to the landlord.  Don't know how this will apply to you in the absence of an SOR or any support.
 
Thanks for the info.

Now, to slightly switch gears, I'm re-reading the stuff the High Commission sent me and they talk about being a Deemed Resident while overseas, and that if I give financial institutions in Canada my Australian address, then they would apply a non-resident tax on it.  This got me wondering what others did; did you not change your Cdn address and just have mail forwarded overseas, change it to someone else's address (parents, etc) or just go with it and change to the OUTCAN address (and pay the tax)? 

Also, speaking of taxes, how did tax returns get filed? 

Thanks again.
 
I set my residence as Ontario based on the Belleville PO Box, bank account and familial ties there.  I then just filed Ontario tax returns.  You could go for deemed resident in which case you fill out special tax return.  When I was OUTCAN they discouraged deemed residents.

http://www.cra-arc.gc.ca/E/pub/tg/t4131/t4131-e.html
http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html
 
I have all my mail from Canada forwarded to the Belleville post office, as this saves anyone mailing something a whole lotta money. Some things though I have sent directly to my Dutch address (Mondial insurance checks, Friends sending Christmas cards, etc.)

For the tax thing, I too kept everything as if I was still living in Ontario. The main reason for this was because I could still use an online tax program and netfile. If you do it the other way, you have to file a papercopy, as it won't let you netfile (unless things have chnaged this year). I also noticed the the amount I paid in taxes was slightly less than if I did it as a deemed resident. Will this stand up to an audit? I'm not sure, but I wasn't given any direction saying what I was doing was wrong.
 
I haven't bothered with the Belleville address, most of my mail is sent direct to Australia. For things like Revenue Canada and my bank, my wife has family in Alberta so I use their address, this works out pretty well come tax time. I will caveat this by saying that if Revenue Canada decided to audit me I would probably be %^$*ed!

The only thing that surprised me was that according to my pay statements I pay no provincial taxes. Not being a tax expert I am assuming that MFSS has switched me to the deemed resident federal tax rate, then come tax time when I file Alberta taxes it balances out the difference between the deemed resident rate and the Alberta rate, which results in a nice return.

I realize this is probably a backwards way of doing things but I'm afraid of having MFSS touch my pay too much. This is the same organization that took 16 months to get my allowances right (and I won't even get into the mess they caused when I delpoyed).

Cheers
 
FWIW - CF members who are OUTCAN are considered Deemed Resident's of Canada.  You don't pay provincial income tax - instead you pay something in the order of 45% of the federal tax rate.  No big deal to file this way, for some you might actually get more of a refund.  It's also audit-proof, and legal.
 
Zoomie said:
FWIW - CF members who are OUTCAN are considered Deemed Resident's of Canada.  You don't pay provincial income tax - instead you pay something in the order of 45% of the federal tax rate.  No big deal to file this way, for some you might actually get more of a refund.  It's also audit-proof, and legal.

Actually, according to this new brief I just found, we are actually considered factual residents, and do out taxes as if we still lived in Canada.

http://www.europe.forces.gc.ca/Resources/UK/Ruislip_DetUK/Documents/Briefing/Canada%20Revenue%20Agency%20UK%20Outreach.pdf

 
I just read that brief and it doesn't categorically state anything different from the CRA website - which pointedly states:

Deemed residents

You may be a deemed resident of Canada for tax purposes if you have severed residential ties with Canada and you are a:

  (1)  member of the Canadian Forces at any time in the tax year;

Factual Residents are those whom travel back and forth between Canada and their place of residence.
 
Right in the section you quoted it says you have to have severed your canadian ties in order to be a deemed resident. Read a little more of the reg and you will see it is very difficult to sever ties as a CF member, especially if you keep a Canadian bank account your pay goes into, own any property in Canada, or have your F&E stored in LTS.
 
Captloadie is absolutely right - you file taxes as a Factual resident of Canada, normally in the last province you were posted. Therefore your bank accounts, your house (if you kept one), your storage items, etc all add up to "substantial ties" back to that province. If you were on IR prior to posting, this could probably be used to change the equation.

Just returned from three years in Europe, having kept a house and all banking in Ottawa. I filed Ontario taxes and know I am on solid ground in the event of audit. Here's why - we were briefed before departure by a Canada Revenue Agency (CRA) foreign tax rep of the tax considerations to consider when OUTCAN. He outlined a case study where a CF member was posted from Quebec to Europe and tried to claim Deemed Resident taxes. On audit, he was assessed to be a Factual Resident of Quebec and had to pay back bucketloads in back taxes.

In summary, just because your buddy recommends something after having got away with it doesn't mean it's legal. Consult the experts and you won't go wrong - they reside at CRA and can give you the straight info without bias. How you decide to apply that advice is up to you.

Forewarned is forearmed!

Cheers.
 
More info for the discussion regarding foreign banking arrangements. At the smaller posts (I have experienced this on both my OUTCAN postings), your admin support is provided on a very limited and remote basis. Your pay will go into a Canadian account and you are responsible to get it into the local currency at your expense using your own ingenuity. There are no shortcuts here, so don't fight the system. Instead, ADAPT. It is far less work. 

These days, online banking systems allow you far more flexibility than you had in the past to pay bills. Some of them must he paid locally, which may require the establishment of a local bank account to pay by cheques, etc. (in the Australian case, the bank taxes drove me nuts!)

Speak to the management of the local bank in your country of posting about lifting the 5 day hold time on transfers. Buy the best account possible in Canada to minimize your withdrawal fees (eg TD "Select Service" account waives all foreign wihdrawal fees for one monthly fee). Raise your withdrawal limits to suit higher cash usage (there is a simultaneous risk to your account if your card/PIN get jacked - it happened to me in Italy - so be careful!). Pay as many bills as possible through e-billing and online payments. See whether you can set up a Standing Advance through your CFSU for official expenses such as rent, TD claims, etc.

Keep your Canadian credit cards active and use them often. You'll pay exchange rates no matter how you slice it, either through foreign transfers to your local bank or on your card.

Foreign postings and banking are not impossible, just different. Every country has different systems and each post has unique requirements. During my last posting to Italy, I spent three years there and didn't open a local account - I managed everything from my Canadian accounts. I opened one "Cadillac" account and used it as the funnel for everything by transferring from other accounts as necessary.

You can make the system work with a little thought. I am preparing now for my next OUTCAN tour (to Africa) and will adjust the plan as necessary to suit the local conditions.

Cheers.
 
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