I am thinking on moving to Canada to work, save for retirement, and move back to Portugal due to the lower cost of living to live my retirement. I will contribute to the Canada Pension Plan and also save for my retirement. I have to calculate how much I want to save to get a fixed retirement salary but I don't know if I'll have to pay taxes over the money I saved on a normal Canadian bank account (taxed in Canada) and then withdrawed in Portugal and how many taxes I'll pay over the Canadian Pension Plan. Thank you in advance for your help.

1 Answer 1


You should probably check this with a tax accountant, but I'll give you the basics.

If you live and work in Canada you will pay Canadian tax on all your income. You will not pay tax in Portugal, except maybe for the first and last years when you move between the two. If you put your retirement savings in a regular investment account then when you move back to Portugal you will not pay tax on what you withdraw from that account, either to Canada or Portugal. However you would need to pay Canadian tax on any interest and capital gains you make on those investments while you are in Canada.

Most Canadians do not do that. They pay retirement savings into a Registered Retirement Savings Plan (RRSP). They claim a tax credit on their contributions, and any interest or capital gains on the RRSP is tax free. However when they withdraw from their RRSP they would pay tax on it as if it was income.(There are limits on how much money you can put in an RRSP).

If you used an RRSP you would have to pay a Witholding Tax on your RRSP withdrawals even after you stopped being a resident in Canada. It is likely that you would not have to also pay Portuguese tax on it because it is already yours and not technically income, but I would check with a tax accountant.

The mathematics of this, and especially deciding which is better, is quite complicated and depends on many things. You should check them with a professional. You should also be aware that tax rules can change over a period of decades.

  • Thank you a lot. I intended to say I was thinking on saving to an RRSP due to the tax benefits but I apparently forgot.
    – user88269
    Apr 20, 2019 at 21:27

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