🌐 International Information Return

Form T1135 must be filed by any Canadian-resident taxpayer (individual, corporation, trust, or certain partnerships) who is not expressly exempt by law and who held, at any point during the tax year, one or more "specified foreign property" (as defined under the Income Tax Act) with a total cost exceeding $100,000 CAD. The form discloses the nature, location, cost, value, and income generated by these foreign assets — even if no tax is owing on them.

Typically reportable assets include:

• Funds held outside Canada
• Shares of non-resident corporations (other than "foreign affiliates" within the meaning of s. 233.4 ITA)
• Indebtedness owed by non-residents
• Interests in non-resident trusts
• Real property located outside Canada (excluding personal-use property and real estate used in an active business)
• Other foreign property (including foreign life insurance policies, precious metals, foreign fund units, options, etc.)
• Specified foreign property held in an account with a Canadian registered securities dealer or a Canadian trust company

Penalties for failure to file or late filing are significant (non-exhaustive list for federal purposes):

• For an ordinary failure to file, the penalty is the greater of $100 and $25 per day for up to 100 days, to a maximum of $2,500.
• If the failure is made knowingly or in circumstances amounting to gross negligence, the penalty is $500 per month of delay, up to 24 months (maximum $12,000), less any penalties already imposed by subsection 162(7) I.T.A..
• Where a formal demand to file has been issued and the person, knowingly or in circumstances amounting to gross negligence, fails to comply, the penalty is $1,000 for each month the return is late (up to $24,000), less any penalties already imposed by subsection 162(7) I.T.A..
• If the delay exceeds 24 months in the context of gross negligence or wilful default, an additional penalty of 5% of the cost of the specified foreign property may apply for each tax year at issue, reduced by penalties already payable under subsections 162(7) and 162(10) I.T.A..
• Additional penalties may apply for misrepresentation or deliberate omission of information.

For tax years ending after December 30, 2025, any taxpayer (individual, corporation, or trust) or any partnership residing in Québec that, in a given tax year or fiscal period, holds specified foreign property with a total cost exceeding $100,000 CAD at any point during that year or period, will also be required to file the new Form TP-1079.8.BE — Declaration Relating to the Holding of Foreign Property — which must be submitted to Revenu Québec no later than the filing deadline for their income or information return for the relevant year or fiscal period. The penalties for failure to file or late filing are significant and are in addition to the federal penalties listed above.

Form T1134 ("Information Return Relating to Controlled and Non-Controlled Foreign Affiliates") must be filed by any Canadian-resident taxpayer (individual, corporation, trust, or certain partnerships) who, at any point during the tax year, held an interest in a "foreign affiliate."

Generally, a foreign affiliate is a non-resident corporation in which the Canadian taxpayer holds at least 1% equity interest and, together with related persons (within the meaning of the ITA), holds at least 10% of equity interest at any point during the year.

The T1134 form requires information about each foreign affiliate, including ownership details and financial information, whether controlled or non-controlled. This reporting obligation applies even if no Canadian tax is payable in respect of those entities.

For taxation years or fiscal periods beginning after 2020, Form T1134 is due 10 months after your year-end.

Penalties for failure to file or late filing:

• For an ordinary failure to file, the penalty is the greater of $100 and $25 per day for up to 100 days, to a maximum of $2,500.
• If the failure is made knowingly or in circumstances amounting to gross negligence, the penalty is $500 per month of delay, up to 24 months (maximum $12,000), reduced by any ordinary late-filing penalty already assessed.
• If the failure continues for more than 24 months in a case involving knowing non-compliance or gross negligence, an additional penalty may apply equal to 5% of the greatest total cost amount at any time in the year of the taxpayer's shares of, and debts owing by, the foreign affiliate, reduced by penalties already payable under the earlier rules.
• Additional penalties may apply for misrepresentation or deliberate omission of information.

These reporting obligations apply even if no tax is payable: whether or not a tax balance is owing is a separate matter from the obligation to file Form T1134 when required by law.