Can I reduce my Canadian taxes for foreign taxes paid on foreign employment income?

Allan Madan, CA
 Jan 23, 2013



I was employed in another country and I had to pay taxes on my wages. Is there any way I can reduce my Canadian taxes with the foreign taxes I paid?


For majority of the countries, yes. Canada has tax treaties with over 50 countries around the world with the main objective of minimizing double taxation. As such, you will be able to claim a ‘Foreign Tax Credit’ for the amount of taxes that you paid to another country when filing your Canadian tax return.

Note that:

  • You will not be able to claim 100% of the foreign taxes paid. Normally, on your foreign income, you will effectively pay the higher tax rate between the foreign country and Canada.
  • You will have to have filed a tax return in the foreign country in order to claim the Foreign Tax Credit in Canada. This is because the CRA does not accept foreign employment income slips (foreign equivalent of Canadian T4 slips) as proof of taxes paid. The CRA would accept foreign tax returns filed as proof.


The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.

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