Foreign tax credits help Canadians avoid double taxation on their worldwide income.
You may be eligible for the federal foreign tax credit if you have business or non-business foreign income. Claim the federal foreign tax credit on Form T2209 when filing your return and keep proof of any foreign taxes paid in case the CRA requests documentation.
Provincial or territorial foreign tax credits may also apply to your non-business income only. Complete Form T2036 for each foreign country where you earned income.
On your return, any income earned or taxes paid must be converted to Canadian dollars. Use the Bank of Canada’s exchange rate from the day of the transaction, or use the average annual exchange rate if you received multiple payments.