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The short answer
Interest on a Nigerian fixed deposit is taxable in Canada if you are resident here: report it on line 12100 in Canadian dollars, converted at the rate for the day it arises, and claim a foreign tax credit for the 10% Nigerian withholding tax rather than reporting the net figure. The Bank of Canada publishes no naira rate, so use another recognised source consistently, and keep the deposit certificate, statements and withholding evidence for at least six years.
Many people who move to Canada leave a naira fixed deposit running at home: it is easy to roll, the rate looks high, and it is there for family needs. The Canadian side is often forgotten until a tax preparer asks whether you have foreign income. Here is how the reporting works, step by step.
Is it taxable in Canada?
A Canadian resident is taxed on worldwide income, and interest on a deposit in Lagos is part of it. CRA's line 12100 page (modified 20 January 2026) says foreign interest is reported in Canadian dollars and that you must report interest even where no slip is issued. A Nigerian bank will not send you a T5, so the figure comes from your own records.
Not sure whether you are resident? See being tax resident in both countries.
When to report it
For investment contracts such as GICs and term deposits acquired after 1989, CRA expects interest to be reported each year as it accrues, for each complete investment year, not only when it is paid. A 12-month naira deposit opened in March and paid at maturity the following March produces interest that belongs to the anniversary year. A deposit that rolls every 90 days pays out and restarts several times a year, so each payment falls in the year it is credited.
If your Nigerian bank pays interest upfront, at the start of the term, the timing differs again. Note the actual credit dates from your statement and ask a preparer if the pattern is unusual.
Which exchange rate
CRA's rule is the rate in effect on the day the amount arises. The difficulty is that the Bank of Canada's daily table, which CRA treats as its default, does not include the naira (table dated 23 October 2026). Income Tax Folio S5-F4-C1 allows another source if it is widely available, verifiable, independent of you, recognised by the market and used consistently from year to year. Bloomberg, Thomson Reuters and OANDA are the examples CRA gives. An annual average can be accepted in some cases, but CRA says generally not where rates move a lot, which is the naira's recent history.
Write down the source and the rate for each credit date and use the same source every year.
Nigerian withholding tax and the credit
Nigerian banks deduct withholding tax from deposit interest, 10% under current practice; the rules are set out in withholding tax on interest in Nigeria. Check your own bank's advice slip for the amount actually deducted. Report the gross interest in Canada, then claim the foreign tax credit on line 40500 and your provincial form. Do not subtract the Nigerian tax from the income figure.
The credit is capped at the lesser of the Nigerian tax and the Canadian tax on that income (Folio S5-F2-C1). Withholding above a rate the Canada-Nigeria tax treaty allows is not creditable; you would have to seek a refund in Nigeria. See claiming the foreign tax credit for Nigerian WHT.
A worked example
Example only: a ₦5,000,000 one-year deposit at an example rate of 20%, credited on maturity, with an example rate on that day of ₦1,100 per CAD.
| Item | Naira | CAD at example ₦1,100 |
|---|---|---|
| Gross interest | ₦1,000,000 | 909.09 |
| Nigerian WHT at 10% | ₦100,000 | 90.91 |
| Net interest received | ₦900,000 | 818.18 |
| Report on line 12100 | 909.09 | |
| Foreign tax paid for the credit | 90.91 |
At a 30% example marginal rate, Canadian tax on CAD 909.09 is CAD 272.73; after the CAD 90.91 credit you owe CAD 181.82 more in Canada.
Other forms and records
- T1135. If the total cost of your specified foreign property, which includes money held outside Canada, passes $100,000 at any point in the year, file Form T1135 by your return due date. Between $100,000 and $250,000 you can use the simplified Part A (CRA Q&A, modified 19 October 2026). See T1135 and Nigerian bank accounts.
- Records. Keep the deposit certificate or deal slip, each maturity or rollover advice, bank statements showing the credits and the WHT, and your exchange-rate workings. CRA asks for records to be kept six years from the end of the tax year they relate to.
- Dollar deposits. A USD fixed deposit is handled the same way, but the Bank of Canada does publish a USD rate, which makes conversion simpler.
Where Pryme fits
If you hold naira with Pryme, a Fixed Savings Box earns at the rate shown in the app, and the same Canadian reporting applies to what it earns. Any statement can be generated as a verifiable statement with VerifyDoc.ai, which helps when a preparer or CRA asks for evidence. Naira is held by a licensed Nigerian microfinance bank; you can open an account from Canada.
Questions people ask
Do I need to declare my Nigerian fixed deposit interest in Canada?
Yes, if you are a Canadian tax resident. Report it in Canadian dollars on line 12100 even though no T5 slip is issued.
What exchange rate do I use for naira interest on my Canadian return?
The rate for the day the interest arises. The Bank of Canada has no naira rate, so CRA allows another recognised source such as Bloomberg, Thomson Reuters or OANDA if used consistently.
Can I claim the 10% Nigerian withholding tax in Canada?
Generally yes, as a foreign tax credit on line 40500 and your provincial form, limited to the Canadian tax on that interest. Report the gross interest, not the net.
Does a Nigerian fixed deposit count for T1135?
Money held outside Canada counts towards the $100,000 cost threshold for Form T1135 along with your other specified foreign property.
Sources
- CRA: Line 12100, interest and other investment income (modified 20 Jan 2026) · accessed Oct 2026
- CRA: Income Tax Folio S5-F4-C1, Income tax reporting currency (updated 27 Jun 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
- Bank of Canada: Daily exchange rates (table dated 23 Oct 2026) · accessed Oct 2026
- CRA: Where to keep your records, how long (modified 3 Aug 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.