Hong Kong MPF, Savings and Shares: How to Report Them After Moving to Canada

How to approach the MPF for tax, reporting interest and dividends, and the T1135

Scott Tang, CPAUpdated 2026-11-052026 rules6 min read

Families who move from Hong Kong to Canada commonly have three things: Mandatory Provident Fund (MPF) accounts, Hong Kong dollar deposits and Hong Kong-listed shares. Hong Kong doesn't tax interest, dividends or capital gains, but once you become a Canadian tax resident, Canada taxes them all the same — and because no tax was paid in Hong Kong, there is generally no foreign tax to credit.

Hong Kong generally doesn't tax deposit interest, dividends or capital gains

Taxed as usual

Interest and foreign dividends are generally fully included; capital gains on shares at the current inclusion rate (one half)

On withdrawal

MPF money is generally included in Canadian income in the year you receive it; check against your specific scheme

T1135

Hong Kong dollar deposits and Hong Kong shares are specified foreign property

Three assets, one table

Asset	Yearly earnings Report every year?	On withdrawal or sale How to report	T1135 Does it count?
Hong Kong dollar deposits	✓Report the interest every year	◐For an individual's dispositions of foreign currency, the net gain or loss for the year is assessed under the $200 rule — see "Foreign-Currency Income and Assets: How to Convert to Canadian Dollars" in this series	✓Yes
Hong Kong shares	✓Report dividends in full; no dividend tax credit	✓Half of the capital gain is included in income	✓Yes (even if held at a Canadian brokerage)
MPF	◐May be a foreign pension or retirement arrangement; check contributions and growth in the account against the scheme's terms	◐Amounts withdrawn are generally included in income in that year; check against your specific scheme	◐Depends on the nature of the scheme; decided case by case

Hong Kong dollar deposits

💰 Yearly earnings: ✓Report the interest every year
💸 On withdrawal or sale: ◐For an individual's dispositions of foreign currency, the net gain or loss for the year is assessed under the $200 rule — see "Foreign-Currency Income and Assets: How to Convert to Canadian Dollars" in this series
📋 T1135: ✓Yes

Hong Kong shares

💰 Yearly earnings: ✓Report dividends in full; no dividend tax credit
💸 On withdrawal or sale: ✓Half of the capital gain is included in income
📋 T1135: ✓Yes (even if held at a Canadian brokerage)

MPF

💰 Yearly earnings: ◐May be a foreign pension or retirement arrangement; check contributions and growth in the account against the scheme's terms
💸 On withdrawal or sale: ◐Amounts withdrawn are generally included in income in that year; check against your specific scheme
📋 T1135: ◐Depends on the nature of the scheme; decided case by case

MPF: the key is when you take the money out

Once you are a Canadian tax resident, how MPF contributions, growth in the account, withdrawals and foreign reporting are treated has to be determined from the specific scheme's terms and the applicable rules. The CRA's past technical interpretations (2001-0072655 and 2021-0909731E5) are opinions on particular cases; they are not binding and may not reflect the CRA's current position. Their general direction is: an MPF is generally a foreign pension plan, contributions can't be deducted in Canada, growth in the account is generally not taxed year by year, and amounts received from the plan are generally included in income (unless the treaty provides otherwise). If Hong Kong taxed the amount, you can claim a foreign tax credit.

Don't simply assume that "Hong Kong doesn't tax it, so Canada won't either", and don't automatically treat the account balance on the day you landed as principal you can later withdraw tax-free. Before a large withdrawal, get the scheme documents and confirm the Canadian treatment and your residency date.

Withdrawn before you become a Canadian resident

Where Hong Kong rules allow a withdrawal

Not yet a Canadian resident when you withdraw

Canada generally doesn't tax it

You need to be able to prove the timing: the withdrawal date and the date your residency began

Withdrawn after you become a Canadian resident

Generally income in Canada; check against your specific scheme

Included in the year of withdrawal

Hong Kong generally withholds no tax, so there is nothing to credit

Taking a large lump sum at once pushes up your tax rate for that year

So your timeline around landing should include the MPF. Whether you can withdraw early, and what the withdrawal involves, depends on the Hong Kong MPF rules; withdrawal claims are now submitted through the eMPF Platform.

Deposits and Hong Kong shares

Report interest every year
Interest on Hong Kong dollar term and savings deposits is reported each year, converted to Canadian dollars. Hong Kong withholds no tax, so there is no foreign tax credit.
Hong Kong share dividends in full
Dividends from foreign companies don't qualify for the Canadian dividend tax credit. Chinese individual income tax withheld on H-shares and similar shares can be credited if it is an income tax (for investment income, up to 15%).
Cost reset on landing
For Hong Kong shares and deposits you had before landing, the cost is the market value and exchange rate on the day you became a resident; when you sell later, only the gain after landing counts.

Points to watch

Plan the timeline first
Whether you withdraw from the MPF, sell Hong Kong shares and close accounts before or after landing can make a big difference to the result.
Keep the evidence
Keep MPF statements, withdrawal confirmations, annual brokerage statements and the valuation on the day you landed on file.
The T1135 counts everything together
Add your Hong Kong dollar deposits and Hong Kong shares to your foreign property in mainland China and the US; if the total cost is more than $100,000, you have to file (except in the year you land).

How Sheng Qian CPA can help

Timeline before landing
We work through the timing for your MPF, deposits and Hong Kong shares together with your landing date.
Landing cost table
We set up the Canadian-dollar cost of your Hong Kong shares and deposits using the market value and exchange rate on the day you landed.
Reported correctly each year
Interest, dividends, withdrawals and the T1135 handled in the same return. For fees, see "What Sheng Qian CPA Can Do for Cross-Border Families: From Tax Returns to Foreign Asset Reporting" in this series.

Sources

CRA technical interpretation: 2001-0072655 Hong Kong's Mandatory Provident Fund (third-party summary; the CRA's original text prevails)
CRA technical interpretation: 2021-0909731E5 Hong Kong Mandatory Provident Fund (reproduced by a third party; the CRA's original text prevails)
CRA: Completing your return for newcomers · Foreign Income Verification Statement (T1135)
Hong Kong Mandatory Provident Fund Schemes Authority: Statutory grounds for early withdrawal of MPF

Disclaimer

This article is general information only and is not tax advice. Everyone's situation is different; please consult a CPA about your specific arrangements, and a qualified local adviser or your trustee about Hong Kong tax and MPF matters. Service fees are as set out in our written quote.

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