Do I need to report foreign income as a self-employed Canadian?

Yes — Canadian residents are taxed on their **worldwide income**, meaning you must report all income earned both inside and outside Canada on your T1 Return, regardless of whether it was taxed in another country. **Foreign business income:** If you earn business income from foreign clients or carry on business activities in other countries, this income is reported on your T2125 in Canadian dollars (using the exchange rate at the time of each transaction, or an average annual rate). **Foreign tax credits:** If you paid tax on the same income in a foreign country, you can claim a **Foreign Tax Credit** on Form T2209 to reduce your Canadian tax owing. This prevents double taxation. **Foreign asset reporting:** If you hold foreign property (investments, bank accounts, real estate) with a total cost exceeding C$100,000 at any time during the year, you must file **Form T1135 (Foreign Income Verification Statement)** by the same date as your T1 Return. Failure to file can result in significant penalties. **Currency conversion:** Report all foreign amounts in Canadian dollars. The Bank of Canada average annual rate is widely accepted — available at bankofcanada.ca.

• Canadian residents are taxed on worldwide income — all foreign income must be reported
• Foreign business income reported on T2125 in Canadian dollars
• Foreign Tax Credits (Form T2209) prevent double taxation
• Foreign property over C$100,000 cost requires Form T1135
• Use Bank of Canada average rate for currency conversion