If you earn investment income from foreign sources like US dividend stocks, international mutual funds, or foreign bank accounts, you must report it on your Canadian tax return in Canadian dollars. The CRA requires all worldwide income to be reported, whether earned domestically or abroad. You'll convert the foreign income to CAD using the exchange rate on the day you received it, and you may also be eligible for foreign tax credits if you paid taxes to another country. Canada's tax system is based on residency, not citizenship. If you're a Canadian resident, you must report all income earned anywhere in the world, including: - Dividends from US or international stocks - Interest from foreign savings accounts or GICs - Capital gains from selling foreign property or investments - Distributions from foreign mutual funds or ETFs - Rental income from properties outside Canada Not reporting foreign investment income can trigger CRA audits, penalties, and interest charges. Being transparent is simpler and safer than trying to hide it. The CRA requires you to convert all foreign income to Canadian dollars on the date you received it.
Yes. If you're a Canadian resident, you must report all investment income earned anywhere in the world, including dividends, interest, and capital gains from US brokerage accounts. Convert the income to Canadian dollars using the Bank of Canada exchange rate on the date you received it.
Foreign withholding tax is money withheld and paid to another country when you earn income there (like US dividend withholding). A foreign tax credit allows you to claim that payment against your Canadian taxes, preventing double taxation. You report the full income amount in Canada and then claim the credit.
No, the T1135 is only required if your foreign property is worth more than CAD $100,000 at any point during the tax year. If your investments stay below this threshold, you don't need to file the form, but you still must report the income.
Both accounts offer tax benefits for foreign investments. RRSPs may reduce or eliminate foreign withholding taxes through tax treaties, while TFSAs let growth accumulate tax-free and offer flexibility. The best choice depends on your income level and long-term goals. Use the [TFSA vs RRSP Comparison](/tools/tfsa-vs-rrsp) tool to compare your options.
Use the Bank of Canada exchange rate for the specific date you received the income. You can find historical rates on the Bank of Canada website or use the rate shown on your bank statement. Convert each payment individually if you received income on different dates throughout the year.