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Foreign Information Reporting Form T1134 - CRA Grants Reprieve Until June 30 - by Jodi Kelleher and Rick Pierini 

Global Tax Adviser

 

February 05, 2013

 

Jodi Kelleher
Vancouver, International Corporate Tax

 

Rick Pierini
Montreal, Canadian Corporate Tax

 

The CRA has now officially confirmed that it will administratively accept the old version of the foreign affiliate information reporting Form T1134 series (i.e., old Forms T1134A and T1134B) until June 30, 2013. Previously, it was unclear whether the CRA would provide transitional relief for mandating the use of new Form T1134, "Information Return Relating To Controlled and Not-Controlled Foreign Affiliates (2011 and later taxation years)".

Background
New Form T1134, "Information Return Relating To Controlled and Not-Controlled Foreign Affiliates (2011 and later taxation years)" consolidates the previous Forms T1134A and T1134B. New Form T1134 requires more information than Forms T1134A and T1134B, specifically for investments in controlled foreign affiliates.

 

New Form T1134 significantly curtails the previous filing exemption so that taxpayers must now file Form T1134 if the historical cost for all of its foreign affiliates is $100,000 or more, even if the criteria of the definition of "dormant" or "inactive" foreign affiliates are met by some entities (i.e., gross receipts are less than $25,000 and fair market value is less than $1 million).

 

Thus, the new form now limits the administrative relief for dormant or inactive foreign affiliates only to situations where the total cost of investment in all foreign affiliates is less than $100,000.

 

Transitional relief
In a notice on its site dated January 24, 2013, the CRA encourages taxpayers to use the revised Form T1134, but notes it will accept older versions of the form on a short transitional basis up to June 30, 2013, subject to validations and requests for additional information, if necessary. Reporting entities that have already filed (for tax years ending after 2010) using the previous versions of the form will not be required to re-file using the new version.

 

For more information, contact your KPMG adviser.

 

 

 

 

Information is current to February 05, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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