Mexico - Canada Taxes on alimony (support) from Mexican resident to Canadian resident
-----Hi there,
I was wondering if perhaps you might be able to help me on a question I am
having about taxes on alimony received from a Mexican resident?
CCRA has told me several different answers and I can't quite determine if my
mom's alimony (just for her...not child support) falls into Article 18 of
the Canada-Mexico Tax Treaty of 1991.
From what I can tell, any money she receives as alimony from her ex-husband
who is a Mexican resident is tax free?
Any help or insight you might have would be absolutely great!
Thanks for your time,
david ingram replies:
Simply put, if your mother's alimony would be taxable in Mexico, it is taxable in Canada if she receives it in Canada.
You first have to determine if it is taxable in Mexico. And the reverse is true. for instance, if I just give my wife $500 a month without a written agreement, it is NOT taxable in Canada and would not be taxable in Mexico if she moved to Mexico.
Article XVIII(4)(b) of the Mexican Canada Income Tax convention reads as follows although I have added the country names in the relative spots:
b) alimony and other similar payments arising in a Contracting State (Mexico) and paid to a resident of the other Contracting State (CANADA) who is subject to tax therein in respect thereof, shall be taxable only in that other State (Canada). However, where a deduction or a credit for alimony or a similar payment is not allowed for the purposes of taxation in the Contracting State(Mexico) in which such payment arises, such payment shall not be taxable in the other Contracting State (Canada).
I was wondering if perhaps you might be able to help me on a question I am
having about taxes on alimony received from a Mexican resident?
CCRA has told me several different answers and I can't quite determine if my
mom's alimony (just for her...not child support) falls into Article 18 of
the Canada-Mexico Tax Treaty of 1991.
From what I can tell, any money she receives as alimony from her ex-husband
who is a Mexican resident is tax free?
Any help or insight you might have would be absolutely great!
Thanks for your time,
david ingram replies:
Simply put, if your mother's alimony would be taxable in Mexico, it is taxable in Canada if she receives it in Canada.
You first have to determine if it is taxable in Mexico. And the reverse is true. for instance, if I just give my wife $500 a month without a written agreement, it is NOT taxable in Canada and would not be taxable in Mexico if she moved to Mexico.
Article XVIII(4)(b) of the Mexican Canada Income Tax convention reads as follows although I have added the country names in the relative spots:
b) alimony and other similar payments arising in a Contracting State (Mexico) and paid to a resident of the other Contracting State (CANADA) who is subject to tax therein in respect thereof, shall be taxable only in that other State (Canada). However, where a deduction or a credit for alimony or a similar payment is not allowed for the purposes of taxation in the Contracting State(Mexico) in which such payment arises, such payment shall not be taxable in the other Contracting State (Canada).
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