Wondering how everyone handles getting T3 slips with foreign tax paid. Taxcycle requires that you enter a country to allow the FTC to be applied but there is no indication as to what country it is most of the time on the slip. The slip states that it can be included on form T2209. Help?
As long as it’s petty cash: Unknown.
Many T3 issuers are sending the T2209 breakdown this year. It may be included in the original T3 mailing or it may be sent separately.
If it is not included, then you can ask the Full Service Investment Advisor or the Slips Issuer for a copy. Yes, that takes more time up front. However I find that it saves time and reputation in the long run. Or, at least that has been my experience.
T2209 may include several countries and currencies. Currently the T3 slip reporting provides room for one country only. I enter the largest tax paid country.
If I don’t see something obvious, I use “United States”. It’s really only an issue where you might have to file a tax return with the other country or if we don’t have a tax treaty with that other country. For the average T3’s from investment accounts, I haven’t seen that as an issue. In the many years I’ve filed this way, CRA hasn’t asked for a more specific breakdown.
I just use the word “Global” if the amounts aren’t material.
#T1 #ForeignTax #ForeignTaxPaid
I am very careful about always completing the Foreign Tax field and having some back-up. I had a couple of clients with whom I went through the wringer in 2008-2010. They were “selected” for slips “verification” of foreign tax. I remember that it was less that $50 on a T3. This led to three years of slips review. After a painful four weeks the returns were accepted as filed.
Rather than putting my clients and myself through the wringer again by trying to get an exact reference, I usually default to the USA. I search online for the mutual fund, investment, or flow through share annual report to obtain the breakdown of holdings and income. If there is a full service broker, then I ask the broker to help obtain the information. Otherwise I get it myself. I deescalate by stating “please advise if you require additional information from the slips issuer”.
I find that #ForeignPensionIncome is a favorite target for post assessment review. For those returns I work hard to obtain a copy of the Foreign Pension Income Statement. I understand that this is part of a CRA “special project” now that foreign tax authorities are sharing taxpayer information.
For my own records, I find that the importance of being clear about the source of Foreign Tax really depends upon the following factors:-
Foreign issued income type - foreign government pension, foreign private pension, foreign business income, foreign held investments.
Canadian issued slips with foreign tax withheld - T3, T5013.
The absolute amount of the #ForeignTaxPaid.
The relative value of the foreign income to Canadian income.
The relative value of the #ForeignTaxPaid when compared to Canadian taxes payable.