I have income from Hong Kong. Their tax basis is Apr1-Mar31. How can I claim foreign tax credit if I will file HK taxes AFTER I file Canadian? Also, do I prorate?

[houstonwong]

If it helps, Hong Kong usually charges a provisional tax for the following year. So for example, in 2017 they charged me provisional tax for 2018 (based on assumption of same income as 2017, which they will either refund if I made less or charge me more if I made more).

[TurboTaxLise]

Please contact the International office before you begin to guide you on how to proceed. Here https://bit.ly/2Hu0CfQ

When claiming any foreign income on a Canadian Tax Return, there are few things to take into consideration. We want to know about your World Income. It boils down to whether you get a full year or is it prorated from your date of entry. You will not be taxed twice on your income from HK, under the tax treaty Canada has with HK as it is taxed at source, this is where the FTC comes into play.

• Residency status must be established firstly, below: https://turbotax.community.intuit.ca/replies/2647682

Under the Income Section, you will find Tslips then drop down to Foreign slip.

You will also have to fill out the T1135 which is located under the same tab– Other Income Sources – Foreign Income Verification Statement.

• More here if needed from TurboTax - How do I report foreign income, foreign pension, and other foreign amounts? https://turbotax.community.intuit.ca/replies/2647976

Apply for the FTC -in your "Find" icon at the top of the page, type in "Foreign Tax Credit" which will open the form needed to apply for this credit.

You can claim a foreign tax credit for the taxes that you paid in HK. The foreign tax credit is the lesser of two amounts:

• The income tax you paid in the foreign country
• The Canadian tax payable on the foreign source of income.

Tax Treaty – Canada with Hong Kong - https://bit.ly/2VrraRR

[houstonwong]

Thanks Lise. But how would I report my foreign tax for this year if I haven’t filed yet (HK tax year just ended 31 March and filing is in June). Do I just enter an estimate based on current HK tax rate?

[TurboTaxLise]

I would suggest you contact the international office (link given in the answer) so they may guide you on how you need to report it given that you have not filed your HK tax yet.