,canada ,cu/oms #a & ,rev5ue ,ag5cy ,9t]pret,n ,bullet9 ,subject3 ,9come ,tax ,act ,=eign ,9come ,taxes z a ,deduc;n ,f ,9come ,numb]3 ,,it-#ejf ,date3 ,janu>y #e1 #aihg ,ref];e3 ,subsec;ns #bj7#aa7 & 7#ab7 7al subsec;ns #ajd7#bb71 #abf7#a7 & 7#g7 & #ach7#e.a77 ,proposals 3ta9$ 9 ! ,notice ( ,ways & ,m1ns ,mo;n ( ,octob] #ca1 #aihf >e n 3sid]$ 9 ? rel1se4 #a4 ,a tax cr$it = =eign 9come or pr(its taxes pd 0a resid5t ( ,canada is p]mitt$ 0virtue ( sec;n #abf z a deduc;n f ,canadian tax o!rwise paya# on t =eign 9come 7see ,,it-#bgj;,r74 ,? bullet9 4cusses subsec;ns #bj7#aa7 & 7#ab7 : provide =! deduc;n ( c]ta9 ,,it-#ejf a#a =eign taxes 9 ! -put,n (a taxpay]'s 9come f a busi;s or prop]ty4 #b4 ,al? bo? subsec;ns #bj7#aa7 & 7#ab7 ref] 6taxes : h be5 pd1 ! deduc;ns 4cuss$ "h"u may only 2 claim$ 9 respect (! tax,n ye> = : ! taxes 7 pd4 ,x is irrelevant :e!r ! taxes 7 pd 2f1 dur+ or af ! ye> ! =eign s\rce 9come >ose4 #c4 ,an 9dividual 79clud+ a tru/7 :o 9 a tax,n ye> e>ns 9come t is 7a7 n 9clud$ 9 9come f a busi;s c>ri$ on 9 a =eign c.try1 & 7b7 f a "picul> prop]ty \tside ,canada t is n r1l prop]ty may d1l ) any 9come or pr(its tax pd "!on =! ye> 6a =eign c.try 9 ! foll[+ mann]3 7c7 deduct "u subsec;n #bj7#aa7 ! por;n1 if any1 (! =eign tax t exce$s #ae@3p (! gross 9come =! ye> f ! "picul> prop]ty2 & 7d7 z 6! am.t n deducti# "u subsec;n #bj7#aa71 7;i7 deduct "p or all ( x "u subsec;n #bj7#ab7 7see #e 2l71 & ,,it-#ejf b#a 7;ii7 9clude ! "p n deduct$ "u subsec;n #bj7#ab7 9 -put+ ! 9dividual's non-busi;s-9come tax =! purpose ( claim+ a =eign tax cr$it =! ye> "u sec;n #abf4 --------------------------------------#b #d4 ,9 calculat+ ! deduc;n "u subsec;n #bj7#aa71 ! actual =eign 9come or pr(its taxes pd ) respect 6! 9come describ$ 9 #c abv %d 2 us$ ": possi#4 ,on ! o!r h&1 dep5d+ on ! circum/.es1 x may 2 nec 6make a det]m9,n (! =eign 9come or pr(its taxes pd : may 2 attributa# 6s* prop]ty4 ,": x is nec 6make s* a det]m9,n all ! relevant facts m/ 2 tak5 963sid],n4 ,= example1 if ! =eign tax (a c.try is det]m9$ on gross prop]ty 9come1 !n a r1sona# por;n (! =eign tax relat+ 69come f prop]ty o!r ?an r1l prop]ty 9 t c.try wd 2 ! propor;n t ! gross 9come f s* prop]ty 9 t c.try is (! gross 9come f all prop]ty 9 t c.try4 ,3v]sely1 if ! =eign tax is calculat$ on ! net =eign- ,,it-#ejf a#b s\rce 9come 9 t c.try1 ! net 9come figures wd 2 us$ 9 ! calcul,n4 #e4 ,9 -put+ 9come =a tax,n ye> a taxpay] 7n limit$ 6an 9dividual z 9 #c abv7 may claim a deduc;n "u subsec;n #bj7#ab7 9 respect ( modifi$ non- busi;s-9come tax pd =! ye> 6a =eign gov]n;t1 b n 9clud+ any s* tax pd 0a corpor,n 9 respect ( 9come f a %>e (a =eign a6iliate4 #f4 ,=! purposes ( subsec;n #bj7#ab71 modifi$ non-busi;s-9come tax has ! m1n+ ( 8non-busi;s-9come tax0 z def9$ 9 p>agraph #abf7#g77c71 modifi$ 0! dele;n ( xs subp>agraphs 7;iii7 & 7;v71 & 9cludes any =eign 9come or pr(its tax except 7a7 a busi;s-9come tax 9 respect ( any busi;s c>ri$ on 9 any c.try o!r ?an ,canada1 7b7 a tax deducti# "u subsec;n #bj7#aa71 7c7 = #aihj & subsequ5t tax,n ye>s1 a tax or ! por;n (a tax impos$ solely ,,it-#ejf b#b on ! basis ( citiz5%ip & t _c r1sonably 2 attributa# 6an 9come s\rce \tside ,canada1 7d7 = #aihd & subsequ5t tax,n ye>s1 any tax t c r1sonably 2 attributa# 6! am.t ( 9come = : an ov]s1s employ;t tax cr$it is availa#1 & 7e7 = #aihe & subsequ5t tax,n ye>s1 any tax attributa# 6a taxa# capital ga9 or a por;n "!( 9 respect ( : ! taxpay] has claim$ a deduc;n "u sec;n #aaj.f4 ,= tax,n ye>s -m5c+ af ,novemb] #ab1 #aiha1 a =eign tax repd or repaya# 0a =eign gov]n;t 6any o!r p]son or "pn]%ip is exclud$ f non-busi;s-9come tax = purposes ( p>agraph #abf7#g77c71 b n = purposes ( subsec;n #bj7#ab74 --------------------------------------#c #g4 ,= tax,n ye>s 5d+ af ,novemb] #ab1 #aiha1 subsec;n #ach7#e.a7 d5ies a life 9sur] resid5t 9 ,canada a deduc;n "u subsec;n #bj7#ab7 = =eign tax relat+ 6xs 9sur.e busi;s4 7,= tax,n ,,it-#ejf a#c ye>s -m5c+ 2f ,april1 #aihc1 h["e1 ? rule only appli$ 9 respect ( an 9sur.e busi;s c>ri$ on \tside ,canada47 #h4 ,non-busi;s-9come tax t has be5 deduct$ 0virtue ( subsec;n #bj7#ab7 is exclud$ f non-busi;s-9come tax = purposes ( p>agraph #abf7#g77c74 ,t is1 a deduc;n "u subsec;n #bj7#ab7 requires an equival5t reduc;n 9 respect (! relevant =eign c.try (! non-busi;s-9come tax eligi# =a =eign tax cr$it1 ! =eign non-busi;s-9come am.t : is us$ 9 calculat+ ! am.t ( =eign tax cr$it : may 2 claim$1 &! am.t ( net 9come us$ 9 t calcul,n4 ,! subsec;n #bj7#ab7 deduc;n results 9 tax relief at ! e6ective tax rates1 :ile ! sec;n #abf relief is usu,y availa# on a doll>-=-doll> basis4 #i4 ,non-busi;s-9come taxes pd 9 respect ( employ;t 9come >e n deducti# "u subsec;n #bj7#ab7 s9ce subsec;n #h7#b7 re/ricts employ;t 9come deduc;ns 6^? all[$ "u sec;n #h4 ,h["e1 a non- ,,it-#ejf b#c busi;s-9come tax pd 0a taxpay] resid5t 9 ,canada on self-employ;t 9come 7e4g41 ,unit$ ,/ates ,social ,secur;y ,tax--see ,,it-#abb;,r7 may 2 deduct$ "u subsec;n #bj7#ab7 6! ext5t t x relates 6busi;s 9come4 #aj4 ,! fact t a =eign 9come or pr(its tax is levi$ on busi;s 9come does n necess>ily m1n t ! tax is a 8busi;s- 9come tax0 z def9$ 9 p>agraph #abf7#g77a74 ,": busi;s 9come 6: ! tax relates is 3sid]$ n 6h a =eign s\rce or n 6be f a busi;s c>ri$ on 9 a =eign c.try1 ! tax wd fail 6qualify z busi;s-9come tax & wd -e )9 ! category ( non-busi;s-9come tax4 ,h["e1 ! 9come 6: x relates wd rema9 8busi;s 9come04 #aa4 ,subsec;n #ajd7#bb7 provides ! rules =! alloc,n ( =eign s\rce 9come & =eign taxes (a tru/ 2t ! tru/ & xs b5efici>ies 7see ,,it-#bja;,r74 ,s9ce ! rules 9 subsec;n #ajd7#bb7 apply only 6t subsec;n & 6sec;n #abf1 a b5efici>y may n utilize ! provi.ns ( ,,it-#ejf c#c subsec;n #bj7#aa7 or 7#ab7 9 respect ( =eign taxes allocat$ 6x "u subsec;n #ajd7#bb74