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Foreign subsidiary reporting means Form T1134. If your Canadian company owns a company abroad, you’ll likely have to file it with the CRA. For a tax year that starts after 2020 it’s due 10 months after your year end, so a December 31, 2026 year is due October 31, 2027.
Which foreign subsidiaries do you report?
The CRA doesn’t use the word subsidiary. It talks about foreign affiliates, which are non-resident corporations or trusts you’re connected to. T1134 covers two kinds: controlled foreign affiliates and non-controlled ones. You file a separate supplement for each affiliate.
Structure matters. Only the lowest-tiered Canadian corporation reports. If Canadian company A owns Canadian company B, and B owns a company in another country, B files and A doesn’t. If you hold the foreign company straight from Canada, that’s you.
Only the lowest-tiered Canadian corporation has to report on its foreign affiliate.
Information returns relating to foreign affiliates, Canada Revenue Agency, canada.ca
There’s also a dormancy exception for small inactive affiliates. The CRA ties it to the cost of your interest (under $100,000) and to the affiliate being dormant or inactive, with gross receipts and asset value tests. Read the current wording before you rely on it, because this is the exemption people stretch the furthest.
When is the report due?
| Tax year of the Canadian filer | Due date |
|---|---|
| Began before 2020 | 15 months after year end |
| Began in 2020 | 12 months after year end |
| Began after 2020 | 10 months after year end |
The clock is your Canadian filer’s year end, not the foreign company’s. A partnership counts from the end of its fiscal period. Note that ten months is later than your T2, which is due six months after year end, so people often file T1134 as an afterthought. Put both dates on the same calendar.
What does a late T1134 cost?
The basic penalty is the greater of $100 or $25 for each day late, up to $2,500. Three days late is $100. Ten days late is $250. At 100 days you hit the $2,500 ceiling and it stops growing.
Knowing failures are treated more harshly. If the CRA finds you left it out on purpose, or through gross negligence, the penalty is $500 a month for up to 24 months, which caps at $12,000, less what was already charged. Later stages carry a percentage penalty, which isn’t detailed here.
What do you need to gather before you file?
Start with a list of every foreign entity the company owns shares in, however small, and the percentage held. Then ask each foreign finance contact for the year’s financial statements in their local currency, the year end date, the country of residence and the main business activity. Currency conversion to Canadian dollars is one more job, so line up the rate rule with your accountant before the numbers arrive.
A realistic timeline helps. Imagine a Vancouver design firm with a December 31 year end and a small studio it owns in Portugal. The T2 is due June 30, and the T1134 isn’t due until the following October 31. That’s a gap of four months, and it’s tempting to let the studio’s paperwork slide. Setting a reminder for the first week of September gives the Lisbon bookkeeper time to answer.
What about tax on the foreign profits?
Filing T1134 is a reporting job. It doesn’t by itself say how much tax you owe. Your Canadian company’s own profits are taxed the usual way, and you can see the rates for a given province in the corporate tax calculator. Our engine shows $27,000 of federal tax on $300,000 of active business income for a small Canadian-controlled private corporation, which is the 9% small business rate. It does not model foreign income, foreign tax credits or the special rules for affiliates, so treat it as a baseline only.
When profit is paid out to shareholders, another layer applies. The dividend tax calculator shows what an individual owner pays on a dividend. If you plan to sell shares of the foreign company, try the capital gains tax calculator for a rough view.
Common mistakes with foreign reporting
Missing an affiliate is the big one. A small holding company in a low-tax country, set up years ago and forgotten, is still an affiliate. Do a yearly review of every legal entity you own, however small.
Another is assuming a related form covers it. The CRA has other returns, such as T106 for dealings with non-arm’s length non-residents, and each has its own rules and dates. The thresholds for those forms weren’t confirmed here, so check them separately.
Finally, gathering figures late. Foreign books often follow a different year end and local accounting rules. Ask the foreign finance team for the numbers in time, because a Canadian penalty doesn’t care that a bookkeeper abroad was slow.
A cross-border structure with real money in it deserves an accountant who does T1134 regularly. Ask how many they filed last year.
Sources, and how we checked them
Filing rules, due dates and penalties come from the Canada Revenue Agency‘s foreign reporting pages, read in September 2026, and the small business rate from its T2 guide. No government body has reviewed or endorsed what you read here.
Frequently asked questions
What form reports a foreign subsidiary in Canada?
Form T1134, the information return for controlled and non-controlled foreign affiliates. You file a separate supplement for each affiliate.
When is T1134 due?
Ten months after the end of your tax year for years beginning after 2020. It was 12 months for years beginning in 2020 and 15 months before that.
Who files when there are several Canadian companies in the chain?
Only the lowest-tiered Canadian corporation reports on the foreign affiliate.
What is the penalty for a late T1134?
The greater of $100 or $25 a day, up to $2,500. Knowing or grossly negligent failures cost $500 a month for up to 24 months.
Can I skip an inactive foreign company?
There's a dormancy exception, tied to the cost of your interest, gross receipts and asset value. Check the current CRA wording before you rely on it.
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