Taxation of foreign income

[tonygow]

My daughter moved to France in August on a special work visa. She has been working there since she arrived.
My understanding is that for tax purposes:
1. She is still deemed a resident of Ontario
2. She must declare her foreign income and all deductions
3. She is eligible for the foreign income tax credit

Is there anything I have missed in my interpretation??

Can she claim expenses incurred in her move to France for work???

[caricole]

Is there anything I have missed in my interpretation??

Check Line 256

It is possible to declare Foreign income and deduct same amount on line 256

That's what I do since several years without any problem

Any foreign tax she pays, is deductable from her Canadian tax

Try it, nothing to loose

[Guban]

If she really is a deemed resident, how about moving expenses?
See: http://www.cra-arc.gc.ca/tx/ndvdls/t...19/mv-eng.html
Being a deemed resident is a pretty specific claim, however.
See: http://www.cra-arc.gc.ca/tx/nnrsdnts...s/dmd-eng.html

I wouldn't try caricole's line 256 deduction, however. Just because it worked, doesn't mean it is legal (otherwise, all foreign income would not be taxable)! Maybe CRA just hasn't caught up yet. There is definitely something "to loose."

[OhGreatGuru]

This is a complicated subject. She might be well advised to hire a tax preparer, at least for the first year.

Her income has to be declared in an appropriate line on Page 2 of the T1 Return. There are 3 possible places to apply for credits for foreign taxes paid.

If the country has a tax treaty, certain foreign income may be exempt from taxes, and may be deducted from income on Line 256.
On line 426 of Schedule 1 it is possible to apply for Overseas Employment Tax Credits. You would have to read T626 and IT 497 to see if it is applicable.
At Line 405 of Schedule 1 you can Deduct Foreign Tax Credits (ie credits for foreign taxes paid). You have to complete T2209 to calculate this. You cannnot deduct amounts for which you have claimed a deduction at Line 256 or 426.

Good luck.