Canadian residents are taxed on income earned worldwide. In most cases, you must pay taxes in the country where you earned the income.
- If you’re a resident, you must declare any income earned outside of Canada on your Canadian tax return
- You will be taxed on this income in Canada. However, in case you have paid tax outside of Canada on this income, you can claim the tax as a foreign tax credit. The foreign tax credit is not a refundable credit but will reduce your tax payable in Canada.
- In order to report properly your non-Canadian income, be sure to keep records of all your payment documents and copies of your income and tax returns. Our advice is to complete your non-Canadian income tax return before you file in Canada in order to determine the foreign tax credit that you can claim.
