If you are a Canadian resident for tax purposes, you must report all income you earn anywhere in the world on your Canadian tax return. CRA determines residency based on your ties to Canada - including where you live, your family, your belongings, and other social and economic ties. To avoid double taxation, Canada allows a foreign tax credit for income tax you paid to a foreign government on income also reported in Canada. If you hold certain foreign assets with a total cost above $100,000 CAD at any time in the year, you must file Form T1135. Canada has tax treaties with many countries to prevent double taxation and clarify which country has taxing rights.