If your Canadian company has foreign affiliates or foreign affiliate interests, then you should be aware of the T1134 form and how to submit it. T1134 tax form filing is required for corporations in certain situations, and not submitting it or submitting it late can result in significant fines by the CRA.
This guidebook will walk you through the T1134 filing requirements, the T1134 due date, and how to avoid common mistakes in the process.
What is a T1134 Form?
The T1134 form is a return of information that must be filed yearly by Canadian-resident corporations (and in some cases, individuals or trusts) that have a substantial interest in foreign affiliates. The form allows the CRA to monitor foreign income and maintain transparency in cross-border tax matters.
Unlike your standard tax return, the Canada T1134 filing is specifically meant to report financial information about foreign-affiliated corporations. It does not deal with Canadian business income. The form covers the financial statements of the affiliate, ownership structures, and any transactions between your company and the affiliate.
If you’re unsure whether you need to file, reviewing your foreign investments and shareholdings carefully can help determine your next step.
T1134 Filing Requirements: Who Must File and Why
According to CRA T1134 filing instructions, you must file the T1134 form if your Canadian business, either directly or indirectly, owns at least 10% of the voting shares of a foreign affiliate, even if that affiliate didn’t generate any active income during the year. The basic T1134 filing requirements include holding 10% or more of a foreign affiliate’s stock, reporting gross income or losses and gross revenue, description of the nature of the affiliate’s business activities, relationships between other foreign entities and transparency and disclosure in all cross-border monetary transactions.
These details help the CRA better understand and monitor income from Canadian-controlled foreign corporations.
T1134 Due Date: Filing Time
Timing is key. For corporations with a fiscal year ending after 2020, the T1134 due date is 10 months after the corporation’s year-end. For example, if your year-end is December 31, 2024, then you must file the T1134 by October 31, 2025.
Missing the deadline can cost you. Late filings incur penalties of $25 per day, up to a maximum of $2,500 per form. In severe cases where omissions are considered willful or negligent, more serious penalties or even legal action could follow.
To avoid that, it’s essential to monitor your deadlines and make sure everything is ready in advance.
Step by Step: Filing the T1134 Form
Below is a simplified step-by-step guide to help you through the Canada T1134 filing process:
- Collect Affiliate Information
Begin by gathering all necessary data: financial statements, business activity reports, and ownership details for each foreign affiliate.
- Determine the Type of Affiliate
Figure out whether each affiliate is controlled or non-controlled. This classification affects the level of detail needed in your reporting.
- Fill Out the T1134 Summary and Supplementals
The T1134 package includes a summary and one supplemental form per affiliate. Ensure each one is completed accurately.
- Verify Cross-Border Transactions
Document any financial transactions between your Canadian corporation and the foreign affiliate during the tax year.
- File Electronically
All T1134 forms must now be submitted online through the CRA’s electronic portal. Paper filings are no longer accepted.
- Submit Before the Deadline
Review everything thoroughly and file before the t1134 due date. Double-check for accuracy to avoid any mistakes or penalties.
Typical Errors in Filing the T1134 Form
Even well-organized companies can make errors when dealing with the T1134 form. Common mistakes include:
- Forgetting to include affiliates with indirect ownership
- Using incomplete or inaccurate financial data
- Missing the filing deadline
- Confusion about ownership percentages or affiliate classification
- Misunderstanding what qualifies as a foreign affiliate
Each of these errors can lead to complications, including CRA audits and fines. That’s why attention to detail and clear understanding are critical throughout the process.
Final Thoughts
Filing the T1134 form is not optional—it’s a legal requirement for Canadian corporations that have foreign affiliates or international investment interests. By understanding your T1134 filing requirements, knowing your due date, and following a clear step-by-step process, you can stay compliant and avoid unnecessary penalties.
For expert guidance and peace of mind, consider working with Numeracy Solutions. Known for offering one of the best business tax services in Canada, they specialize in international tax compliance and can help ensure your T1134 filings are accurate, timely, and stress-free.”