If you live in Canada and own shares of a company outside Canada, you may have to report that company to the CRA every year on Form T1134, even if it pays you nothing. The form applies to individuals, corporations and trusts resident in Canada, and to partnerships with Canadian members.
Does my foreign company count?
A non-resident corporation is your foreign affiliate when you own at least 1% of it, and you and the people related to you together own at least 10%. Ownership through other companies counts.
It is a controlled foreign affiliate when you — alone or with related persons, or with a small group of other Canadian shareholders — control it. Controlled affiliates require more detailed reporting, and certain passive income they earn (FAPI) may be taxable in Canada each year even if it is not paid out.
When is it due?
Within 10 months after the end of your tax year — for individuals with a calendar year, by October 31 of the following year. The deadline was previously 15 months; the 10-month deadline applies to tax years beginning after 2020.
When you don't need to file
- Your first year in Canada: an individual does not file T1134 for the year they first become a Canadian resident.
- Small, inactive companies: a detailed supplement is not required for an affiliate that is "dormant" — the cost of your shares in it is under $100,000, its gross receipts for the year are under $100,000, and its assets never exceed $1 million. Some summary information is still reported.
Penalties
A late T1134 costs $25 per day, from a minimum of $100 up to $2,500 per return. Much larger penalties apply if a return is knowingly not filed, and the CRA gets more time to reassess.
Missed filings?
If you have not been filing, the CRA's Voluntary Disclosures Program (VDP) may let you catch up with reduced penalties — the earlier you apply, the more relief is available.
If you own shares of a company outside Canada, please contact us — we'll confirm whether you need to file and prepare the return.