OTTAWA: The Tax-Free Savings Account (TFSA) is a structure that was first introduced in Canada in 2009. Essentially, it is as the name implies, tax free. As you might expect, you pay no tax on contributions as the money does come, as you say, from earnings that will already have gone through the income tax regime.
However, you also pay no tax on any interest or capital gain made, nor are you taxed on withdrawals. There is an upper limit on annual contributions.
One thing you may have missed from the Canadian point of view is that you must be resident in Canada to reap the benefits of such an account. If you leave Canada, as you propose to do, you will be charged 1 per cent per month yes, month tax on any further contributions you make until those contributions are fully withdrawn subsequently from your account, or you return to become tax resident again in Canada.
