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The short answer
Coupons on Nigerian Eurobonds are foreign interest income for a Canadian resident, reported on line 12100 in Canadian dollars at the Bank of Canada USD rate for each payment date. Selling a bond before maturity can also give a capital gain or loss, with the purchase cost and the sale proceeds each converted at their own date's rate. Whether any Nigerian tax applies depends on the bond's terms; if none is withheld there is no foreign tax credit.
Federal Government of Nigeria Eurobonds are dollar bonds sold to international investors, settled through international clearing systems and usually held through a broker or a private bank. The Debt Management Office's FAQ on its domestic dollar bond notes that Eurobonds typically trade in minimum lots of about US$200,000 and are listed on Euroclear, which is why many Nigerians abroad hold them through a fund rather than directly. This article is about holding the bonds themselves.
Coupons: reported as interest, in Canadian dollars
The CRA's line 12100 page says foreign interest is reported in Canadian dollars, converted at the Bank of Canada rate for the day the amount arises. Eurobond coupons are paid in US dollars, and USD is on the Bank of Canada's daily table, so the conversion is simple: take each coupon's payment date and that day's published rate. Report the gross coupon. If anything was withheld, the same page says not to subtract it from the income; claim a foreign tax credit instead.
Most Eurobonds pay coupons twice a year, so two conversions a year per bond is typical. A Canadian broker will usually issue a slip for interest it pays to you; if you hold the bond abroad, there may be no slip, and the CRA's page is clear that you report the income anyway.
Worked example (illustrative figures only)
| Coupon | USD | Example BoC rate | CAD |
|---|---|---|---|
| First half-year, on USD 200,000 at an example 8% | 8,000 | 1.37 | 10,960 |
| Second half-year | 8,000 | 1.39 | 11,120 |
| Reported on line 12100 for the year | 16,000 | 22,080 |
The 8% coupon and the rates are examples only. Check: 200,000 × 8% ÷ 2 = 8,000; 8,000 × 1.37 = 10,960; 8,000 × 1.39 = 11,120; total 22,080.
Buying and selling between coupon dates
When you buy a bond between coupon dates you normally pay the seller the interest accrued so far, and when you sell you are paid it. Brokers show this separately on the trade confirmation. How that accrued amount is treated on your return, as interest or as an adjustment, is a detail to check with your broker's tax slip or a preparer; keep every confirmation so it can be done correctly.
Selling before maturity: the capital gain
If you sell, Guide T4037 applies. It converts the sale proceeds at the exchange rate at the time of sale and the adjusted cost base at the rate when you bought, with selling costs at the rate when incurred. Because both sides are in CAD at different rates, the result includes the movement of the US dollar against the Canadian dollar as well as any change in the bond's price. A bond bought at 95 and sold at 95 can still produce a gain or loss in CAD.
Holding to maturity ends with repayment of the face value in USD, which is a disposition too: compare the CAD value of the repayment on the day with your CAD cost.
Nigerian tax
The DMO's FAQ says income on its domestic FGN US dollar bond is exempt from companies income tax, personal income tax and capital gains tax. That statement is about the domestic bond, not Eurobonds. For a Eurobond, check the offering document and your broker's coupon advice to see whether anything is withheld. If nothing is, there is no Nigerian tax to credit, and the full coupon is taxed in Canada. If something is, Folio S5-F2-C1 limits the credit to the lesser of the foreign tax paid and the Canadian tax on that income.
Form T1135
The CRA's T1135 questions and answers treat shares of non-resident corporations as specified foreign property even when held through a Canadian broker, and its list of exclusions does not include foreign government debt. Count the cost of your Eurobonds, at the CAD value when bought, toward the CAD 100,000 threshold. A total between CAD 100,000 and CAD 250,000 throughout the year can use the simplified method. Property held inside an RRSP or TFSA is excluded.
Holding a Nigerian Eurobond fund instead of the bonds changes the detail but not the principle. Distributions from the fund are income you report in CAD, and the T1135 questions and answers list interests in non-resident mutual funds as specified foreign property, so the fund's cost counts toward the threshold in the same way.
What to keep
- Trade confirmations for every purchase and sale, including accrued interest.
- Coupon advices showing gross amount, any withholding and the payment date.
- The Bank of Canada USD rate for each relevant date.
- Year-end holdings statements for T1135.
For where Canadians can buy these bonds and the minimum sizes, see Nigerian Eurobonds through a Canadian brokerage; for naira government bonds, FGN bond coupons and Canadian tax. The Nigerian instruments themselves are described in Diaspora investment options: Nigeria's dollar bond and Eurobonds.
Where Pryme fits
Pryme does not sell bonds. If coupons are paid to you in USD, a Pryme account can hold them in a USD balance alongside NGN, GBP and EUR (multicurrency), and you can generate a verifiable statement through VerifyDoc.ai for your records.
Questions people ask
Are Nigerian Eurobond coupons taxable in Canada?
Yes, for a Canadian resident. Report them on line 12100 in Canadian dollars at the Bank of Canada USD rate for each payment date.
Does Nigeria tax Eurobond interest?
Check the bond's offering document and coupon advice. The DMO's tax exemption statement is for its domestic dollar bond, not Eurobonds.
Do Eurobonds count for T1135?
Count them toward the CAD 100,000 cost test. The CRA's T1135 Q&A does not exclude foreign government debt; RRSP and TFSA holdings are excluded.
How is a gain on selling a Eurobond worked out?
Convert the proceeds at the sale-date rate and the cost at the purchase-date rate, per T4037. Currency movement is part of the gain or loss.
Sources
- CRA: Line 12100, Interest and other investment income (modified 20 Jan 2026) · accessed Oct 2026
- Bank of Canada: Daily exchange rates (table dated 23 Oct 2026) · accessed Oct 2026
- CRA: Guide T4037, Capital Gains 2025 (modified 11 Feb 2026) · accessed Oct 2026
- DMO: Domestic FGN US Dollar Bond FAQs (Aug 2024) · accessed Oct 2026
- CRA: Income Tax Folio S5-F2-C1, Foreign Tax Credit (modified 31 Mar 2026) · accessed Oct 2026
- CRA: Questions and answers about Form T1135 (modified 19 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.