How to Report Foreign Income in Canada as a Newcomer

Key takeaways

From your residency date, report world income: foreign wages, interest, rent, pensions and gains
Income from before your residency date is not taxed in Canada; you only report it for benefits
Convert to Canadian dollars at the Bank of Canada rate for the day, or the annual average rate for regular payments
Report the full amount before foreign tax; then claim the foreign tax credit on Form T2209
Property you owned on arrival gets a new cost: its value on the day you became a resident

What foreign income do you have to report?

The key date is the day you became a resident of Canada for tax purposes. This is usually the day you arrived and set up a home here. Check yours with the tax residency checker.

Before your residency date: foreign income is not taxed in Canada. You enter it as “net world income before entry” in your tax software. The CRA uses it to work out your benefits and some credits.
From your residency date: report your world income for the rest of the year. This includes money you earn abroad and money you leave in a foreign bank account.

This also applies every year after. Interest on savings back home, rent from a flat you still own, and a foreign pension are all taxable in Canada while you are a resident.

Where does each type of foreign income go?

Foreign income	Where it goes on your return	Notes
Wages from a foreign employer (no T4 slip)	Line 10400	Includes remote work for a company abroad after you arrive
Interest and dividends from foreign banks or shares	Line 12100	Foreign dividends do not get the dividend tax credit
Rent from property abroad	Line 12600, using Form T776	You can deduct allowed expenses; see home-country property
Foreign pension	Line 11500	A tax treaty may exempt part of it; see foreign pensions
Gains when you sell foreign property	Schedule 3, line 12700	Use your new cost from your arrival date (see below)
Income a tax treaty makes tax-free in Canada	Include it, then deduct it on line 25600	Check the treaty for your country on tax treaties

Gifts and inheritances are generally not income. Savings you bring with you are also not income; only what they earn after your residency date is.

How do you convert foreign income to Canadian dollars?

Your return must be in Canadian dollars. The CRA’s rules:

One payment: use the Bank of Canada exchange rate on the day you received the income.
Payments at different times in the year (for example, monthly rent or a pension): the CRA may accept the Bank of Canada annual average rate. It may not accept an average if rates changed a lot during the year.
Another source: the CRA may accept a rate from another provider if it is widely available, verifiable, independent and used the same way every year. Its currency folio gives Bloomberg, Thomson Reuters and OANDA as examples.

Write down which rate you used and where it came from. Use the same method each year.

Do not use the rate your bank or money transfer service gave you when you sent money. That rate includes a markup and is not the official rate.

Will you pay tax twice on the same income?

Usually not. If another country taxed income that you also report in Canada, you can claim a foreign tax credit.

Report the full income, before any foreign tax was taken off. Do not subtract the foreign tax from the income.
For each country, the federal credit is generally the lower of: the foreign tax you actually paid, or the Canadian tax on your net income from that country.
Use Form T2209 for the federal credit (line 40500). Use Form T2036 for the provincial or territorial credit, except in Quebec, where Revenu Québec has its own rules.
Keep proof of the foreign tax paid, such as a tax certificate or foreign return.

A tax treaty may also lower the foreign tax or make some income taxable in only one country. Estimate your credit with the foreign tax credit calculator.

Example: interest from a home-country bank

Lena became a resident of Ontario on March 1, 2026. She kept a savings account in her home country. After March 1, it paid interest every month. The yearly total was $2,000 in Canadian dollars, using the Bank of Canada annual average rate. Her home country withheld $200 of tax (10%).

Income she reports: $2,000 on line 12100, not $1,800.
Canadian federal tax on that income: Form T2209 works it out as a share of her basic federal tax: $2,000 ÷ her net income × her basic federal tax. Say her net income is $50,000 and her basic federal tax, after personal credits, is $4,000. Then the share is 4% × $4,000 = $160.
Federal foreign tax credit: the lower of $200 (foreign tax paid) and $160 (Canadian tax on that income), so $160.
Result: she pays no extra federal tax on the interest. The other $40 of foreign tax is not used for the federal credit. Form T2036 may give an Ontario credit for some of it.

These numbers are only an illustration. Personal credits lower your basic federal tax, so the Canadian tax on foreign income is often less than your top tax rate times the income. Your software does the exact calculation.

Interest she earned in January and February, before she became a resident, goes in the world income box. It is not taxed in Canada.

What about property you owned before you came?

When you become a resident, the CRA treats you as if you sold certain property and bought it back at its fair market value on that day. The CRA’s examples are shares, jewellery, paintings or a collection. That value becomes your new cost.

This matters when you sell later. You only pay Canadian tax on the gain after you arrived. Keep proof of the value on your arrival date, such as a broker statement or a valuation.

If the total cost of your foreign property is over $100,000, you may need Form T1135. You do not file it for the year you first became a resident. For later years, your cost is the value on your arrival date. See the T1135 checker.

Which records should you keep?

Bank and broker statements showing foreign interest, dividends and sales
Rent records and expense receipts for property abroad
Pension statements
Proof of foreign tax paid
The exchange rates you used, with the source and dates
Proof of your residency date, and values of property on that date

For the foreign tax credit, foreign-language documents need a translation. The CRA lists who can certify it, and you cannot certify a translation of your own documents. The CRA advises keeping records for at least six years.

Common foreign income mistakes

Leaving out small foreign interest. All of it is taxable after your residency date. Repeated omissions of $500 or more can lead to a penalty.
Reporting pre-arrival income as taxable. It goes in the world income box only.
Reporting income after foreign tax. Report the full amount and claim the credit.
Using your transfer rate. Use the Bank of Canada rate or another accepted source.
Using the original purchase price when you sell property you owned before arrival. Use the value on your residency date.

Common questions

Do I report income I earned before I moved to Canada?

You report it as world income before entry, but it is not taxed in Canada. The CRA uses it for benefit and credit calculations.

Do I pay Canadian tax on interest from my bank back home?

Yes, on interest paid after you became a resident. Report it in Canadian dollars. If tax was withheld abroad, you may claim a foreign tax credit.

Which exchange rate should I use?

The Bank of Canada rate on the day you received the income. For payments spread over the year, you may use the Bank of Canada annual average rate.

Is money I bring to Canada taxable?

No. Moving your own savings is not income. Only income those savings earn after your residency date is taxable.

Do I file Form T1135 in my first year?

No. The CRA says you do not file Form T1135 for the tax year you first became a resident.

Sources

Checked against these sources on October 10, 2026. Spotted something out of date? Tell us.

How to report foreign income as a new Canadian resident