Canadian residents are taxed on their worldwide income.  Depending on the terms of the treaty (if there is one) between Canada and the country income is earned from, tax may be withheld by the payer in that country.  Depending on the nature of the income and the other country’s tax laws, the withheld tax may be the taxpayer’s final tax obligation to that country.  In certain cases, it may be possible to have the amount withheld reduced.  To avoid double taxation from both countries, Canada Revenue Agency generally allows a tax credit on the taxpayer’s Canadian tax return for the final amount of foreign tax paid.

Certain Canadian residents owning specified foreign property with a cost exceeding $100,000 in Canadian currency at any time during a year are required to file the T1135 Foreign Income Verification Statement and submit to Canada Revenue Agency by the annual due date.  A significant amount of information is required about the foreign property, and penalties for not filing the form as required can be onerous.

Please contact us for more information on how we can assist with your situation.