T2209: 1   Select: 

Federal Foreign Tax Credits T2209
     
General information
 
This credit is for foreign income or profits taxes you paid on income you received from outside Canada and reported on your Canadian return. Tax treaties with other countries may affect whether you are eligible for this credit:
 
Notes
You may have deducted an amount on line 25600 of your return for income that is not taxable in Canada under a tax treaty. In this case, do not include that income in your "Net foreign non-business income" (line 43300) or in your "Net foreign business income" (line 43900). Also, do not include any foreign tax withheld from it in your "Non-business income tax paid to a foreign country" (line 43100) or in your "Business income tax paid to a foreign country" (line 43400).

Where a foreign pension income qualifies as pension income eligible for income splitting under the Income Tax Act and the pensioner (transferring spouse) and the receiving spouse have jointly elected to split such foreign pension income, any related foreign taxes paid may also be split on the same basis. The total of the split foreign taxes claimed by the pensioner and the receiving spouse cannot be more than the pensioner's total foreign taxes paid in relation to the split foreign pension income. For more information about splitting pension income, see form T1032, Joint Election to Split Pension Income for 2023.

 
If you paid tax to more than one foreign country, and the total foreign taxes paid to all foreign countries was more than $200, you need to do a separate calculation for each country for which you claim a foreign tax credit. In this case, enter the total of your allowable federal foreign tax credit on this form.
 
 You need to do a separate calculation for business income taxes paid to each foreign country. In this case, use this form to calculate your credit for both non-business income taxes and the business income taxes paid to each foreign country.
 
 In most cases, the foreign tax credit you can claim for each foreign country is whichever of the following two amounts is lower:
• the foreign income tax you actually paid
• the tax otherwise due in Canada on your net income from that country
 
 Note
If you paid tax on income from foreign property (other than real property), your foreign tax credit for the income from that property cannot be more than 15% of your net income from that property; however, you may be able to deduct on line 23200 of your return the part of the foreign taxes you paid over 15%.
 
Your contribution to a foreign public pension plan is considered a non-business income tax for foreign tax credit purposes when the following two conditions apply:
• You are required to make the contribution under the legislation of the foreign country.
Note
Contributions made under the United States (U.S.) Federal Insurance Contributions Act (FICA), including Social security and Medicare taxes, qualify for this credit.
• It is reasonable to conclude that you will not be eligible for any financial benefit from your contribution considering that the employment in the foreign country was temporary and for a short period of time.
     
 
How to claim this credit
 
• Do all of your calculations in Canadian dollars)
• If you were a member of a partnership and are entitled to claim a part of the foreign taxes the partnership paid, include in your calculations the amount shown in the financial statements or in box 171 and box 172 of your T5013 slip, Statement of Partnership Income.
• Claim the amount from line 12 of this form on line 40500 of your return. The amount on line 12 should not be more than the amount on line 42900 of your return.
 
Your federal foreign tax credit on non-business income may be less than the tax you paid to a foreign country. If this is the case, and you were not a resident of Quebec on December 31, 2023, you may be able to claim a provincial or territorial foreign tax credit. To help you calculate the credit, get Form T2036, Provincial or Territorial Foreign Tax Credit. Attach a completed copy of the form to your paper return.
 
 If you were a resident of Quebec on December 31, 2023, see Revenue Quebec's Guide to the Income Tax Return.
 
 Also, on line 23200 of your return, you may be able to deduct the amount of net foreign taxes you paid for which you have not received a federal, provincial, or territorial foreign tax credit. This does not include certain taxes you paid, such as those on amounts you could have deducted under a tax treaty on line 25600 of your return. For more information, see Income Tax Folio S5-F2-C1, Foreign Tax Credit.
 
Note
You may have earned foreign income in your Tax-Free Savings Account (TFSA). If this is the case, do not include this income in your "Net foreign non-business income" (line 43300). Also, do not include any foreign tax withheld from it in your "Non-business income tax paid to a foreign country" (line 43100).
 
 
Supporting documents
     
If you are filing electronically, keep all your documents in case we ask to see them later.
 
 If you are filing a paper return, such as a notice of assessment or other similar document from the foreign tax authority, showing foreign taxes you paid, and a note showing your calculations. You must also include this form.
 
 If you paid taxes to the U.S., attach your Form W-2, U.S. 1040 return, U.S. Account Transcript, and any other supporting documents that apply.
 
 If any of your documents are in a foreign language, the CRA needs a copy of the original documents written in the foreign language with an acceptable English or French translation. To be acceptable, the signatory's name has to be printed, in the Latin alphabet, and the translation has to meet one of the following conditions:
• it is be certified by an official with the authority to administer an oath or solemn declaration (commissioner of oaths, notary public, or lawyer) unless it was done by a translator who is a member in good standing of one of the provincial or territorial organizations of translators and interpreters of Canada
• it has the seal and signature of an official from the foreign country's embassy, high commission, or consulate confirming it is a true translation
• it has the seal and signature of a Chartered Professional Accountant (CPA), Chartered Accountant (CA), Certified Management Accountant (CMA), or Certified General Accountant (CGA) confirming it is a true translation
• it includes a written statement indicating the profession and the signature of a teacher, professor, or a religious leader confirming it is a true translation.
 
Note
To be acceptable, your name cannot be the same as the signatory.
 
Federal Foreign Tax Credits T2209

Use this form to calculate the amount you can deduct from federal tax for 2023 or a later year. If this claim is for a year before 2023, go to canada.ca/cra-forms to get a previous version of this form.

You can claim this credit if you were resident in Canada at any time in the tax year and you had to include, on your Canadian return, income that came from a foreign country for which you paid non-business or business taxes to that foreign country.

Submit only one Form T2209. If your total foreign taxes paid to all foreign countries was more than $200, calculate the total foreign taxes paid for each foreign country on a separate sheet and enter the total on this form.

For more information, see Income Tax Folio S5-F2-C1, Foreign Tax Credit.

 
  
Country or countries for which you are making this claim:    
 
  
Federal non-business foreign tax credit
                     
Non-business income tax paid to a foreign country (1) 43100  1 
 
Net foreign non-business income (2) 43300  X  Basic federal tax (4) =  2 
Net income (3)
 
Enter the amount from line 1 or line 2, whichever is less Federal non-business foreign tax credit  3 
 
  
Federal business foreign tax credit
                     
Business-income tax paid to a foreign country (5) for the year, plus any unused foreign tax credits for that country for the 10 (6) years before and the 3 years immediately after this year 43400  4 
 
Net foreign business income (7) 43900  X  Basic federal tax (8) =  5 
Net income (3)
 
Federal surtax on income you earned outside Canada: amount from line 10 of Part 2 of Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions, or 48% of the amount from line 42900 of your return. Enter the amount that applies to the country or countries you identified at the top of this page. +  6 
Add lines 5 and 6 =  7 
Add basic federal tax (8) and the amount from line 6  8 
Enter the amount from line 3, if any  9 
Line 8 minus line 9 =    10 
 
Enter the amount from line 4, 7, or 10, whichever is the least Federal business foreign tax credit  11 
 
Federal foreign tax credit
                     
Add lines 3 and 11 Federal foreign tax credit  12 
The amount on line 12 should not be more than the amount on line 42900 of your return.
Enter the amount from line 12 on line 40500 of your return.
 
     
(1) Non-business income tax paid to a foreign country
Total of non-business income or profits tax you paid to that country or to a political subdivision of that country for the year, minus any part of this tax that is deductible under subsection 20(11) or deducted under subsection 20(12) of the Canadian Income Tax Act. Non-business income tax paid to a foreign country does not include tax that can reasonably be attributed to an amount that:
• any other person or partnership has received, or is entitled to receive from the foreign country
• relates to taxable capital gains from that country, and you or your spouse or common-law partner claimed a capital gains deduction for that income
• was deductible as income exempt from tax under a tax treaty between Canada and that country
• was taxable in the foreign country because you were a citizen of that country, and relates to income from a source within Canada
 
Note
Any amount of tax you paid to a foreign government in excess of the amount you had to pay according to a tax treaty is considered a voluntary contribution and does not qualify as foreign taxes paid.
     
(2) Net foreign non-business income
Net amount you calculate when the non-business income you earned in a foreign country is more than the non-business losses you incurred in that country. When you calculate the non-business income and losses, claim the allowable expenses and deductions relating to the foreign income or loss. Subtract all of the following from your foreign non-business income:
• your income from that foreign country for which you claimed a capital gains deduction
• your income that was, under a tax treaty between Canada and that country, deductible as exempt from tax in Canada or in that country
• your foreign resource and exploration and development expenses
• a deduction you claimed under subsections 20(11) or 20(12) and under subsection 4(3) relating to the foreign income, including any deduction claimed for:
  • your foreign union dues
  • your contributions to a foreign pension plan or a social security arrangement
  • your foreign carrying charges
 
Do not reduce your foreign non-business income by any deduction you claimed for a dividend you received from a controlled foreign affiliate. If your net foreign non-business income is more than your net income, use your net income in the calculation.
 
 For more information on deductions claimed under subsections 20(11) and 20(12) of the Act, see Income Tax Folio S5-F2-C1, Foreign Tax Credit.
 
Note
Include only your foreign non-business income for the part of the year you were a resident of Canada.
 
 
(3) Net income
Line 23600 of your return plus the amount on line 4 of Form T1206, Tax on Split Income, minus any:
 
• amount deductible as a Canadian Forces personnel and police deduction (line 24400 of your return)
• amount deductible as security options deductions (line 24900 of your return)
• amount deductible as an other payments deduction (line 25000 of your return)
• net capital losses of other years you claimed (line 25300 of your return)
• capital gains deduction you claimed (line 25400 of your return)
• amounts deductible as net employment income from a prescribed international organization, as foreign income exempt under a tax treaty, or as adult basic education tuition assistance (included on line 25600 of your return)
 
     
(4) Basic federal tax
Line 42900 of your return plus any:
• federal dividend tax credit (line 40425 of your return)
• federal surtax on income you earned outside Canada (line 10 of Part 2 of Form T2203 or 48% of the amount from line 42900 of your return)
minus any::
• refundable Quebec abatement (line 44000 of your return or line 15 of Part 2 of Form T2203)
• federal refundable First Nations abatement (line 44100 of your return)
 
Note
If you were a resident of Quebec, federal tax is the amount on line 42900 of your return plus any:
  • federal dividend tax credit (line 40425 of your return)
minus any:
  • refundable Quebec abatement (line 44000 of your return or line 15 of Part 2 of Form T2203)
 
 
(5) Business income tax paid to a foreign country
Total of business income or profits tax you paid to a country or a political subdivision of a country for the year (see note 2 below). It does not include any part of the business income tax that can be reasonably attributed to an amount that any other person or partnership has received or is entitled to receive from a country, or that was payable on income that was exempt from tax under a tax treaty between Canada and that country.
 
Note 1
Any amount of tax you paid to a foreign government in excess of the amount you had to pay according to a tax treaty is considered a voluntary contribution and does not qualify as foreign taxes paid.
Note 2
If you were a resident of Quebec, multiply this amount by 55%.
 
 
(6) Unused business foreign tax credits
Unused business foreign tax credits can be carried forward 10 years and carried back 3 years.
 
 
(7) Net foreign business income
Net amount by which the business income you earned in a foreign country is more than the business losses you incurred in that country. When you calculate the business income and losses, claim the allowable expenses and deductions relating to the foreign income or loss, including foreign resource and exploration and development deductions. Also reduce your foreign business income by any income from that country that was, under a tax treaty between Canada and that country, exempt from tax in Canada or in that country. If your net foreign business income is more than your net income, use your net income in the calculation.
 
Note
Include only the foreign business income for the part of the year you were a resident of Canada.
 
 
(8) Basic federal tax
Line 42900 of your return plus any federal dividend tax credit (line 40425 of your return).
 
Note
If you were a resident of Quebec, these instructions do not apply. Instead follow the instructions in the note provided under footnote (4) above to calculate the "Basic federal tax" (8) at line 5 of the form.