Form T1134 Explained: Canadians With Foreign Affiliates
Who files for a U.S. subsidiary or U.S. LLC, what it reports, the deadline, and the penalties
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
Form T1134 is the CRA return a Canadian resident files for each foreign affiliate — a non-resident corporation of which they own at least 1 percent and, with related persons, at least 10 percent. The usual Canadian cases are a U.S. subsidiary and a U.S. LLC, which Canada treats as a corporation even when the United States disregards it.
On this page
Who files
| Owner | Foreign affiliate | T1134? |
|---|---|---|
| Canadian corporation | Its U.S. C corporation subsidiary | Yes |
| Canadian individual | A U.S. LLC holding a Florida condo (a corporation for Canada) | Yes |
| Canadian individual | A U.S. limited partnership interest | No — a partnership; reportable on T1135 if total specified foreign property costs more than C$100,000 at any time in the year |
| Canadian with under 1 percent or under 10 percent with related persons | — | No (but T1135 may apply) |
For tax years beginning after 2020, no supplement is needed for an affiliate whose total cost amount to the reporting entity stayed under C$100,000 throughout the year and that is dormant or inactive — gross receipts under C$100,000 and assets worth no more than C$1,000,000 — though it's still listed on the summary.
What it reports
The affiliate's identity, ownership, financial information and surplus accounts (exempt, taxable, hybrid surplus) for every affiliate; for controlled affiliates, also employees, revenue sources, foreign accrual property income (the FAPI guide), and transactions with the reporting taxpayer.
Deadline and penalties
Due 10 months after the end of the reporting taxpayer's tax year for tax years beginning after 2020 (15 months for years beginning before 2020, 12 for years beginning in 2020). Late filing costs C$25 per day (minimum C$100) up to C$2,500 per affiliate; a knowing or grossly negligent failure costs C$500 a month up to C$12,000 (C$1,000 a month up to C$24,000 after a CRA demand), plus 5% of the cost of the affiliate's shares and debt once it passes 24 months. Separately, the CRA has three extra years beyond the normal reassessment period to reassess income relating to a foreign affiliate.
Frequently asked questions
Do I need to file T1134 for my U.S. LLC?
Yes, if you're a Canadian resident — Canada treats the LLC as a corporation, so it's a foreign affiliate.
When is T1134 due?
Ten months after the end of your tax year (for tax years beginning after 2020).
What's the penalty for not filing?
C$25 per day (minimum C$100) up to C$2,500 per affiliate — and up to C$24,000 plus 5% of the investment for knowing or grossly negligent failures.
Is a U.S. subsidiary of my Canadian company a foreign affiliate?
Yes — the Canadian company files T1134 for it.
Official sources
The Canada Revenue Agency explains: “For tax years that begin after 2020, Form T1134 must be filed within 10 months of the end of the reporting taxpayer's tax year or, in the case of a partnership, fiscal period.” — Canada Revenue Agency, Information returns relating to foreign affiliates, https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/information-returns-relating-foreign-affiliates.html
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our Canadian Tax Desk handles T1134 foreign affiliate reporting, surplus computations, and FAPI reporting for Canadian owners of U.S. entities. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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