Federal foreign non-business income tax credit

Q: How much funding can be received?

There is no informations about how much funding can be received.

Q: What is the deadline to apply?

The program is accepting continuous intake

Q: 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

Q: Who are the financial supporters of the Federal foreign non-business income tax credit?

Federal foreign non-business income tax credit is funded by Government of Canada

Q: 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: • Canadian resident corporations • Corporations with non-business income taxed by a foreign country • Authorized foreign banks on their Canadian banking business with foreign income sources

Q: Who can I contact for more information about the Federal foreign non-business income tax credit?

You can contact Government of Canada.

Q: Where is the Federal foreign non-business income tax credit available?

The Federal foreign non-business income tax credit program is available across Canada.

Last Update: July 22, 2025

Canada

Reduces double taxation on foreign non-business income for corporations

At a glance

Eligible Funding

No Condition

Timeline

Unspecified

Financing Type

Tax Credits

Eligible Industries

All industries

Funds Providers

Unspecified

Program status

Open

Overview

The Federal Foreign Non-Business Income Tax Credit provides Canadian residents and authorized foreign banks with a tax credit to prevent double taxation on non-business income earned and taxed in foreign countries, such as dividends, interest, and capital gains. There is no specified maximum funding amount, as the credit is applied to reduce Part I tax based on the amount of eligible foreign non-business income tax paid.

Activities funded

Claiming a tax credit to reduce double taxation on non-business income (such as dividends, interest, and capital gains) earned in a foreign country.
Applying for tax relief on non-business income earned abroad and taxed by a foreign government.

Eligibility

The applicant must be a Canadian resident corporation.
The applicant must have earned non-business income from a foreign country that was taxed by that foreign country.
The applicant must not include any income that is exempt from tax in Canada under an income tax treaty.
The applicant may be an authorized foreign bank with Canadian banking business from foreign sources.

Who is eligible?

Canadian resident corporations earning non-business income from foreign countries
Authorized foreign banks conducting Canadian banking business with sources in foreign countries

Who is not eligible

Companies seeking credit for foreign tax paid on income that is exempt from tax in Canada under an income tax treaty.
Businesses attempting to claim the credit for dividends received from foreign affiliates.
Corporations with only income from operating a business in a foreign country, rather than non-business income.

Eligible expenses

Foreign non-business income tax paid on dividends earned in a foreign country.
Foreign non-business income tax paid on interest income from a foreign country.
Foreign non-business income tax paid on capital gains from a foreign country.

Eligible geographic areas

Companies based in Canada.

How to apply

Collect and review financial documents

Gather all relevant documentation on foreign non-business income earned
Identify countries where foreign taxes were paid
Ensure the income qualifies under the credit requirements

Complete Schedule 21 for each country

Fill out Part 1 of Schedule 21 for each country where foreign income tax was paid
Ensure accurate calculations for each country separately
Use additional Schedules if required for multiple countries

Calculate and enter total credit

Add all allowable foreign non-business income tax credits in column I of Schedule 21
Enter the total allowable credit or a lesser amount on line 632
Verify all figures for accuracy before proceeding

Attach and submit with tax return

Attach completed Schedule 21 to your federal tax return
Ensure all supporting documents are included
Confirm compliance with tax treaty exemptions if applicable

Additional information

The credit applies to non-business income such as dividends, interest, and capital gains from foreign sources, but not to income exempt under tax treaties.
If unclaimed federal credits remain, they may be claimed as provincial or territorial foreign tax credits.
You may deduct non-business foreign income tax instead of claiming the credit under subsection 20(12).
Calculations must be performed separately for each country; use additional Schedules if necessary.

Apply to this program

Frequently Asked Questions about the Federal foreign non-business income tax credit Program

Here are answers to the most common questions about the Federal foreign non-business income tax credit. This section explains what the program is, how much funding is available, eligibility requirements, application deadlines, and other important details to help you determine if this grant is right for your business.