Do I need to declare all income received in Ukraine?

Short answer: Yes — if you are a resident of Canada for tax purposes, you are required to declare all income earned in Ukraine or anywhere else in the world. This is a basic principle of Canadian tax law: Canadian residents are taxed on their worldwide income, regardless of where it is earned.

Determining tax residency

Key criteria of the CRA (Canada Revenue Agency):

  • Factual residency: determined not by citizenship, but by the totality of your residential ties to Canada:

  • residence in Canada (owned or rented)

  • spouse/partner and dependents living in Canada

  • personal property (car, furniture), bank accounts, credit cards, membership in organizations, driver's license, provincial health insurance, etc.

  • 183-day rule: even if you don't have “strong” ties, if you're in Canada for 183+ days/year, you're considered a deemed resident.

CUAET and Ukrainian refugees: Resident ties usually arise from the day of arrival: living with relatives, having a SIN, opening a bank account — all of these create a strong connection to Canada.

What is included in global income

If you are a Canadian tax resident, you must declare:

  • From Ukraine: salary, sole proprietor income, pensions, social benefits, income from rent and sale of property, investment income (dividends, interest), income from cryptocurrencies, etc.
  • From other countries: similarly — everything except income earned before becoming a Canadian resident.
  • Conversion: all amounts are converted to CAD at the official exchange rate on the date of receipt. For pensions, the annual average exchange rate is allowed.

Tax agreement between Canada and Ukraine

There is a bilateral convention to avoid double taxation:

  • Taxes already paid in Ukraine can be credited (foreign tax credit system).
  • Tie-breaker rules apply in cases of dual residency:
  • permanent home
  • center of vital interests
  • place of habitual residence
  • citizenship

Remember: applying these rules can be tricky and affect your benefits, so check with experts.

How taxes paid in Ukraine are credited

  • Federal foreign tax credit: allows you to take into account taxes paid in Ukraine (maximum — the lesser of the Ukrainian and Canadian taxes on the same income).
  • Documents: a certificate of payment is required — often legalized/apostilled and translated.
  • Alberta has its own rules for provincial credits.

Special features of certain types of income

  • Salary: subject to declaration and taxation in Canada from the date of becoming a resident (income prior to this is not taxable in Canada).
  • Self-employment income: in Canada, this is self-employment income, additional reporting requirements may apply.
  • Pensions: taxable in Canada, Ukrainian taxes are credited.
  • Investments: dividends, interest, sale of assets — tax credits are similar.

Reporting foreign assets (Form T1135)

  • You must file Form T1135 if the total value of all foreign assets (bank accounts, securities, real estate not for personal use, etc.) for the year was $100,000 CAD or more.
  • Penalties: for late or incorrect filing — $25 for each day of delay (maximum $2,500).

Practical tips for Calgary residents

  • Determine your date of residence: keep documents confirming your date of entry, residence, bank and social connections.
  • Record all income, expenses and tax payments in Ukraine: this will help you justify your foreign tax credit.
  • Plan ahead: do not delay gathering and translating documents; seek advice in advance.
  • Complicated cases (dual residency): use the services of tax advisors.
  • Pay attention to changes in Ukrainian legislation (e.g., military tax).

Conclusion

Canadian residents are required to declare and pay taxes in Canada on all income earned in Ukraine. Double taxation is avoided through the foreign tax credit system and tax treaties between countries. Strict compliance with these rules is the key to financial security and avoiding penalties and stress from the CRA and Ukrainian tax authorities.