Tax notes for newcomers from Sri Lanka, China and Nigeria

Rules that apply to all three countries

• The CRA says residents report world income from the day they become residents. Income before that date is entered only for benefits.
• Convert foreign amounts at the Bank of Canada rate for the day you received them.
• If your home country taxed income that Canada also taxes, claim a foreign tax credit on Form T2209 and your provincial form. The credit is generally the lesser of the foreign tax and the Canadian tax on that income.
• Property you owned when you arrived gets a new cost: its fair market value on your residency date.
• From the year after you arrive, Form T1135 may apply if your foreign property cost is over $100,000. Check with the T1135 checker.

Sri Lanka: what the treaty says

The convention was signed on June 23, 1982 and entered into force on June 9, 1986. In Canada it applies from January 1, 1986.

For other Sri Lankan interest and dividends, the treaty sets no limit. The Sri Lanka treaty also lets a country tax some gains of a former resident for six years after they leave (Article 13). Sri Lankan rules are set by the Inland Revenue Department of Sri Lanka.

China: what the agreement says

The agreement was signed on May 12, 1986 and came into force on December 29, 1986. It applies from January 1, 1987. The text does not mention Hong Kong.

Rules on moving money out of China are not tax treaty rules. See bringing money from China. For Chinese tax, check China’s State Taxation Administration.

Nigeria: what the agreement says

The agreement was signed on August 4, 1992. Global Affairs Canada records its entry into force as November 16, 1999. In Canada it applies from January 1, 2000.

The Nigeria agreement says its interest and dividend limits do not apply to arrangements set up mainly to get those benefits. For Nigerian tax, check Nigeria’s national tax authority. See also bringing money from Nigeria.

Example: interest from home in each country

Three newcomers each earn $2,000 of interest from a home bank account after their residency date in 2026. Each home country withholds the most its treaty allows.

Each person reports the full $2,000 and claims a foreign tax credit for the tax withheld, up to the Canadian tax on that $2,000. Try your own numbers in the foreign tax credit calculator.

Pensions from home

Unlike the India and Philippines treaties, these three let Canada tax a pension from home. The home country may also tax it: Sri Lanka up to a cap, Nigeria with no cap in the article, and China under its “Other income” article. Report the gross pension on line 11500 and claim a credit for the home-country tax. See foreign pensions and Canadian tax.

Common mistakes

• Assuming the treaty rate was applied. Check your bank or broker statement. If more was withheld than the treaty allows, the CRA says the excess does not count for the foreign tax credit. Ask your home country’s tax authority for a refund.
• Reporting only what you bring to Canada. Interest, rent and dividends count when earned, not when you move the money.
• Using the date you landed when you settled later. Your residency date is when you set up ties, such as a home. See the tax residency checker.
• Forgetting the six-year rule. If you sell property after leaving Sri Lanka, Sri Lanka may still tax some gains for six years.
• Mixing up China and Hong Kong. The Canada–China agreement text does not mention Hong Kong.

Next steps

• Compare all five treaties in Canada’s tax treaties compared.
• Own a home or land back home? Read selling or renting out property in your home country.
• Both countries claim you? Read dual residency and the tie-breaker.

Common questions

Sources

• Finance Canada: Canada–Sri Lanka tax convention, signed June 23, 1982
• Publications Canada: Canada–Sri Lanka convention, Canada Treaty Series 1986 No. 24 (in force June 9, 1986)
• Finance Canada: Canada–China tax agreement, signed May 12, 1986
• Justice Laws: SI/87-36, notice that the Canada–China agreement came into force December 29, 1986
• Canada–Nigeria tax agreement, signed August 4, 1992 (Global Affairs Canada treaty text)
• Global Affairs Canada: Canada–Nigeria tax agreement record (entry into force November 16, 1999)
• Finance Canada: Tax treaties in force
• CRA: Completing your return for newcomers
• CRA: Line 40500, Federal foreign tax credit
• CRA: Income Tax Folio S5-F2-C1, Foreign tax credit (¶1.35, tax withheld above the treaty rate)
• CRA: Line 11500, Other pensions and superannuation (pensions from a foreign country)
• CRA: Questions and answers about Form T1135
• Bank of Canada: Exchange rates
• Inland Revenue Department of Sri Lanka

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