Things you need to know if you have income in and outside of Canada.

By Oksana Madera | Thursday, February 9, 2017

This happens quite often, but not always we know that the income earned outside of Canada may be taxed. According to the Tax Act, Canada's residents pay taxes on income earned anywhere in the world. In this article, I want to tell you about the most important points of this subject. Unfortunately, it is impossible to touch on all the nuances, because the topic is extensive and has a lot of flowing, which depend on specific situations.

First and foremost, it is important to remember that the country, where you earn your income, has first rights for your taxes. However, you can get additional tax credits in the amount of tax paid, if countries have treaties. This means that if in any country you earned $ 15,000 and paid $ 2,000 of taxes, and, for example, in Canada on this amount you have to pay $ 3,000 of taxes, the final amount of debt will be $ 1,000.

Unfortunately, but this formula does not always work, and therefore there is a possibility of double taxation. You can not get the full tax credit if it would be a country with which there is no agreement.

In any case, you have to include this income on your tax return and have proof of tax payment in the other country.

If revenues were obtained in different countries, you will need to submit a separate form - foreign income tax credit form - for each country. If you have not and business income, you must submit it using separate forms.

You have to pay taxes on income earned in Canada, even if you are a non-resident of Canada. Unlike residents of the country, non-residents' income is generally taxed at a fixed rate.

And never forget: ignorance of the law is no excuse.