Éric Jobidon, fiscaliste, B.A.A., D. Fisc.

Form T1135: declare foreign-source income

International tax  —   —  Share

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As the name suggests, Form T1135, Foreign Income Verification Statement is used to report foreign-source income and assets. Thus, Canadian residents who own specified foreign property with a total cost greater than $ 100,000 must complete the form in order to report both income and the value of foreign source assets.

For example, specified foreign property includes the following property:

  • bank account located abroad;
  • shares of the capital stock of a non-Canadian corporation;
  • US equities, even when held in an account in Canada;
  • rental property located abroad.

To these few examples, several other assets can be added, but these are the most common. It is important to note that foreign stocks held with a Canadian value broker must also be declared, if the threshold of $ 100,000 is reached.

Watch out for penalties

If Form T1135 is not completed properly within the prescribed time frame, severe penalties may apply. The filing deadlines for Form T1135 are the same as for the Canadian income tax return. Thus, individuals have until April 30 to file it, while self-employed workers and their spouses must complete it by June 30 at the latest.

Form T1134

In some cases, owning shares of a non-resident corporation will instead trigger the requirement to file Form T1134 Information Return Relating to Controlled and Non-Controlled Foreign Affiliates. Thus, it will not be necessary to complete the T1135 form.

Given the complexity of the rules surrounding the declaration of foreign property, it is a good idea to contact a tax professional who has experience in international taxation. They can help you validate whether Form T1135 applies to your situation.