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No single official list of coming cross-border accounting changes for Canada exists, so the practical way to prepare is to know the rules that already bite. Three matter most for people and small firms with foreign ties: the T1135 for foreign property costing more than $100,000, the 25% Part XIII withholding on payments to non-residents, and the treaty rates that can lower it.
Why prepare when you can’t see the change coming?
Because the standing rules are where mistakes happen. A change in a treaty or a form will be announced by the CRA or the Department of Finance, and if your records are already in order it takes an afternoon to adapt. If they aren’t, every new rule is a scramble.
The CRA even says you should verify tax treaty rates and exemptions on a regular basis, since negotiations are ongoing. Put a check in the calendar twice a year, maybe when the clocks change.
Do you have to file a T1135?
If you’re a Canadian resident individual, corporation or certain trust and, at any time in the year, you own specified foreign property costing more than $100,000, yes. Cost is what counts, not market value. The CRA’s page on the Foreign Income Verification Statement sets out the threshold and the two reporting methods.
| Total cost of specified foreign property | Reporting |
|---|---|
| More than $100,000, under $250,000 | Part A, simplified |
| $250,000 or more | Part B, detailed |
Say you hold $60,000 in a US brokerage account and $55,000 in a foreign savings account, both at cost. That’s $115,000, so you file, using the simplified method. Add a $140,000 foreign rental condo and the total hits $255,000, which tips you into the detailed Part B. Read the CRA’s definition of specified foreign property before you decide what counts.
The form goes in with your return. Employees file on or before April 30 and self-employed people on or before June 15. A corporation has six months after its fiscal period ends. Those are the 2025-return dates as the CRA page gives them, and no 2026 dates were published when I checked.
What does a late T1135 cost?
The CRA’s foreign reporting page gives $25 a day for up to 100 days, with a minimum of $100 and a maximum of $2,500, for failing to file a return. It points to a separate table for the other penalties, which I haven’t reproduced because the amounts depend on the situation. Read that table before you decide a late filing is cheap.
How do payments to non-residents work?
If your business pays a non-resident, you may have to withhold. The general Part XIII rate is 25%, and a treaty or the Income Tax Act can reduce it or remove it. On a $10,000 payment at the full rate, that’s $2,500 withheld and remitted, and $7,500 paid across.
To see why treaties matter, imagine a treaty rate of 10% applied to the same payment. You’d withhold $1,000 and pay $9,000 across. The rate here is made up for the arithmetic, so look up the real one for the country and type of payment.
The NR4 return reports it, due March 31 of the year after the payment. To use a treaty rate, the payer typically needs the non-resident’s country of residence and the treaty provision, and the CRA form for that is the NR301. Where no treaty applies, the full 25% does.
Which calculators help with cross-border cases?
None of them handles foreign tax credits, and that’s a limit worth stating. What they do is give you the Canadian side. The income tax calculator shows federal and provincial tax on your Canadian income. The dividend tax calculator is for Canadian dividends, and the capital gains tax calculator handles gains on a sale. For a Canadian company, the corporate tax calculator is the place to start.
The capital gains rate deserves a note. The proposal to raise the inclusion rate to two thirds was cancelled in the Prime Minister’s release of March 21, 2025, and the working figure for 2026 is 50%, though a CRA page for the year wasn’t available to confirm it.
What should you keep on file for foreign property?
Think of Priya in Mississauga, who opened a brokerage account in the US years ago and tops it up a few times a year. Each purchase has a date and a cost in the other currency. Keep the statements, the purchase confirmations and the exchange rates you used, together in one folder per year. Come tax time you’ll want the cost figure at your fingertips, since the $100,000 test uses cost and not value. If a CRA letter shows up three years later, you can answer it in an afternoon.
Mistakes to avoid
Judging the $100,000 line by value. Forgetting that the threshold applies at any time in the year, so a balance that dipped by December still counts. Paying a foreign contractor in full and finding out about withholding later. And assuming that a rule from last year still holds.
Who should you ask when a case gets hard? A Canadian tax professional who does international files, because treaty rules and foreign tax credits are outside what a calculator can settle.
Our sources
The T1135 threshold, filing dates and penalty figure come from the Canada Revenue Agency‘s foreign reporting pages. The Part XIII rate, NR4 date and treaty notes come from its payments to non-residents pages. Dates shown are those for the 2025 return. Nothing here is advice on a specific case, and this site has no tie to any government body.
Frequently asked questions
When do I file a T1135?
When you are a Canadian resident and, at any time in the year, own specified foreign property costing more than $100,000.
What is the difference between Part A and Part B?
Part A is the simplified method for a total cost above $100,000 and below $250,000. Part B is the detailed method for $250,000 or more.
What is the general Part XIII rate?
25% on amounts paid or credited to non-residents. A treaty or the Income Tax Act can reduce it or remove it.
When is the NR4 return due?
March 31 of the year following the calendar year of payment.
How do I keep up with treaty changes?
The CRA says to verify treaty rates and exemptions regularly because negotiations are ongoing. Check its pages twice a year.
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