When sending or receiving an international money transfer, it’s useful to familiarize yourself with the regulations that apply to you and the other party. This includes transfer limits, tax regulations, and whether you need to declare the transaction to any regulatory bodies.
In this article, we’ll cover:
When sending money internationally, especially for the first time with the bank or transfer provider you are using, you will need to provide a number of documents to verify your identity. These include:
In some cases, you may also need to provide:
However, that’s not to say that your money transfer provider or financial institution won’t have its own limits. To give you an idea of the types of limitations providers may have in place, here are the limits for a few of our top providers:
Elsewhere, the maximum amount you can send depends on what payment option you choose, the country you’re sending to, and the country you’re sending from, as well as any transaction limits in place by the company’s partners. If you are sending to a particular country or would like to use a specific payment method.
XE Money Transfer:
XE Money Transfer is known for being a good option if you are looking to send a large sum abroad in particular, as the company tends to cater to these types of international transfers specifically. You can transfer up to CAD $535,000 with XE online per single transfer.
XE also has a specialist team for sending larger sums.
PaySend will allow you to send up to $1,000 per month with no additional documentation after creating your account every six months. To increase those limits, you’ll need to provide proof of ID such as a passport or driving license and proof of address. For large sums over $10,000, you may also need to provide a utility bill, a bank statement, employer payslips, or anything else that will prove the source of funds.
Wise: Wise will allow you to send up to CAD $9,500 per day, or CAD $30,000 per week by direct debit. If sending via debit or credit card, you can send up to CAD $3,000 per transfer.
The best way to send your money abroad really depends on a number of mitigating factors surrounding your transfer. You have several choices to get your money to your recipient, with the two main options being either your bank or a specialist transfer provider.
Banks are a popular option because they’re convenient, well-known, and familiar (and therefore trustworthy) for many people. You can arrange your transfer in person, via the phone, or using your online banking app. However, transfers using your bank will typically have expensive fees for sending money abroad.
Specialist transfer providers such as WorldRemit and XE can offer international transfers for lower fees than traditional banks, which is why, increasingly, they’re the number one choice for people regularly sending money abroad.
When finding the best option for you with our comparison engine, a few things you’ll want to look out for include the cost of the transfer, the markup on the exchange rate, speed, payment options, security, and the overall amount your recipient will receive after completing their transfer.
Does the IRS have any specific international wire transfer regulations or rules?
You only really need to concern yourself with IRS regulations when sending a wire transfer to the US valued at $10,000 or more. Generally speaking, your bank or money transfer service will report transfers at or over $10,000 to the IRS directly to ensure transfers are not connected to illegal activity.
Make sure you are aware of the process
If you are sending sums this large, it may be a good idea to discuss the transaction with a professional accountant so you are aware of what documents, taxes, fees, and regulations may be associated with such a transfer.
For example, you might be asked to provide documents such as:
Being asked for these documents may feel excessive, but remember, the transfer provider you are using is legally obliged to request these documents to ensure the money being moved comes from legitimate sources.
Transfers over $10,000 both to and from the US need to comply with US regulations. This means that any transfer leaving or entering the US over this amount will be reported accordingly by your transfer provider or bank.
If you are sending a sum that needs to be reported to the IRS, your transfer provider/bank will send the following information:
The bottom line is that whether you’re sending money to the US from Canada, you should make sure you’re informed about your responsibilities and the regulations surrounding transfers – especially if you are dealing with large sums.
Suppose you are making a large transfer for something such as a property purchase. In that case, it may be a good idea to seek professional advice from an accountant who can advise you on what steps to take and documentation to provide to ensure the relevant parties are assured your transaction is above board.
We encourage you to learn more about sending money internationally by reading our guides on How to Find the Best Exchange Rate and multi-currency accounts. These will help you understand the process of converting currencies during an international transfer.
Yasmin Purnell is a Content Writer and Editor for MoneyTransfers.com. Having over 5 years’ experience writing across a range of industries including finance, insurance, and travel, Yasmin joined the team with a mission to make international money transfers and everything they encompass accessible to all.