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Source verified July 9, 2026
Federal foreign non-business income tax credit
Foreign income and logging tax credit schedule
Latest source updateLast Update: April 2, 2026Latest change: The Federal Foreign Non-Business Income Tax Credit chapter has been updated with extended reference dates, a fixed 20.5% minimum tax SFTC calculation, and new trust form T3FFT guidance.View change
Latest source update
Last Update: April 2, 2026
Latest change: The Federal Foreign Non-Business Income Tax Credit chapter has been updated with extended reference dates, a fixed 20.5% minimum tax SFTC calculation, and new trust form T3FFT guidance.
Federal foreign non-business income tax credit chapter updated
The Federal Foreign Non-Business Income Tax Credit page has been significantly updated with new information and extended validity dates. The chapter's application or reference date has been updated from December 1, 2015 to March 31, 2026, representing a major timeline shift for this technical guidance. The minimum tax calculation for the specified foreign tax credit (SFTC) now uses a fixed 20.5% rate instead of a variable appropriate percentage, which affects how certain tax calculations are performed. Additionally, a new trust form T3FFT has been added for claiming foreign tax credits, and a new Information Circular reference IC71-17R6 has been incorporated into the guidance. The page structure also includes a new History link and reformatted table of contents anchor IDs for improved navigation.
Funding available
Varies by project
Deadline
Open continuously
Location
Canada
Overview
Schedule 21 helps corporations resident in Canada and authorized foreign banks claim foreign income tax credits and the federal logging tax credit. It covers federal foreign non-business income tax credit, federal foreign business income tax credit, provincial or territorial foreign non-business income tax credit, and logging income for British Columbia and Quebec.
/100
Opportunity Score
Moderate potential, but conditions must align.
At a glance
Funding available
Financing goals
- No objectives are currently available
Eligible Funding
- Varies by project
Funds Providers
Eligible candidates
Eligible Industries
- All industries
Location
- Canada
Legal structures
- For-profit business
Annual revenue
- All revenue ranges
Organisation size
- All organization sizes
Audience
- Canadians
Next Steps
1
Determine your project
2
Validate your eligibility
Documents Needed
- Schedule 21
Official resources
Eligibility
Who is eligible?
- Corporations resident in Canada at any time in the year.
- Authorized foreign banks.
Ineligible Costs and Activities
- Income that is exempt from tax in Canada under an income tax treaty.
- Dividends received from foreign affiliates.
- Tax-exempt income as defined in subsection 126(7).
- Foreign tax paid on dividends received from foreign affiliates.
- Tax paid for property other than capital property from which the corporation is not expected to realize a profit.
How to apply
- Use Schedule 21 to calculate the foreign income tax credits.
- Calculate the foreign income tax credits for each country separately.
- Attach another schedule if the corporation is claiming credits for more than five countries.
- Enter the total deductible credit, or a lesser amount, on the relevant line of the T2 return.
Processing and Agreement
- Calculate foreign income tax credits for each country separately.
- Attach another schedule if the corporation is claiming credits for more than five countries.
- Enter the deductible credit or a lesser amount on line 632 of the T2 return for foreign non-business income tax credit.
- Enter the deductible credit or a lesser amount on line 636 of the T2 return for foreign business income tax credit.
- Enter the federal logging tax credit or a lesser amount on line 640 of the T2 return.
Additional information
- Unused federal foreign business income tax credits expire after 10 tax years.
- Total carryback cannot be more than the unused foreign business income tax credit.
- For the federal logging tax credit, corporations may claim income from logging under Regulation 700 for British Columbia and Quebec.
Frequently Asked Questions about the Federal foreign non-business income tax credit Program
What is the Federal foreign non-business income tax credit?
Schedule 21 helps corporations resident in Canada and authorized foreign banks claim foreign income tax credits and the federal logging tax credit. It covers federal foreign non-business income tax credit, federal foreign business income tax credit, provincial or territorial foreign non-business income tax credit, and logging income for British Columbia and Quebec.
Who is eligible for the Federal foreign non-business income tax credit program?
To be eligible for the Federal foreign non-business income tax credit program, you must:
Corporations resident in Canada at any time in the year or authorized foreign banks.
Can claim foreign income tax credits or the federal logging tax credit.
Foreign income tax credits must be calculated separately by country.
Who can I contact for more information about the Federal foreign non-business income tax credit?
You can contact Canada Revenue Agency (CRA).
Where is the Federal foreign non-business income tax credit available?
The Federal foreign non-business income tax credit program is available across Canada.
Is the Federal foreign non-business income tax credit a grant, loan, or tax credit?
Federal foreign non-business income tax credit is a Tax Credits
Who are the financial supporters of the Federal foreign non-business income tax credit?
Federal foreign non-business income tax credit is funded by Canada Revenue Agency (CRA)