Do I need to declare income I earned from sources outside of Canada?

by TurboTax•4• Updated 3 weeks ago

Whether you need to declare income from outside sources depends on many factors, including your residency status, the type of income earned, and the amount and nature of your foreign investments.

All amounts must be reported in Canadian dollars.

Use the Bank of Canada exchange rate that was in effect on the day you received the income.
If you received this income a number of times during the year, use the average annual exchange rate.

Foreign income

A resident of Canada must report their world-wide income for income tax. If you paid taxes to a foreign country on the foreign income you earned, the CRA doesn't allow you to decrease your income for Canadian tax purposes by that amount. Instead, you may be able to claim a foreign tax credit on your federal return.

Becoming a resident

If you immigrated to Canada and became a resident, the CRA considers you to have sold and immediately repurchased the property that you held or brought with you. This forms a cost base for all the property you held at the time you became a resident. If you dispose of any of that property (for example, by selling it), this cost base will be used to calculate your capital gain or loss.

Foreign property and investments (T1135)

The CRA requires you to report foreign property and investments if the total cost of all of your foreign property is greater than $100,000 CAD at any time during the year. The CRA could impose penalties for failing to report this information on your T1135, which is a form that is separate from your income tax return.