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Foreign property reporting for a Canadian corporation comes down to one form and one number. If your company owned specified foreign property costing more than $100,000 at any point in the year, it files Form T1135, the Foreign Income Verification Statement, by the due date of its tax return.
Does your corporation have to file the T1135?
The test looks at cost, not market value, and at any time in the year, not the year end. So a US account that cost $120,000 and was sold in March still counts. Add up everything that qualifies. Two properties at $60,000 each put you over the line, even though neither one would on its own.
The CRA lists what counts as specified foreign property: funds held outside Canada, shares of non-resident corporations, real estate and other tangible property abroad, debts owed by non-residents, interests in non-resident trusts and partnerships, and precious metals held outside the country. It also lists what doesn’t. Property used or held exclusively in carrying on an active business is out. So are shares in a foreign affiliate and personal-use property.
That active business carve-out is where people get tripped. A warehouse you use to run your company’s own operations is one thing. A rental condo your corporation holds as an investment is another, and it’s risky to assume it qualifies as active. Read the CRA form guide for your exact case.
Picture a small Winnipeg design firm with a US bank account that held $70,000 and a brokerage account that cost $45,000 over the year. Neither is over $100,000 alone, but together they cost $115,000, so the firm files. If the same firm only held the bank account, no form.
What does the form ask for?
There are two ways to report, and the cost of your property decides which one you use.
| Total cost of specified foreign property | What you report |
|---|---|
| More than $100,000 but under $250,000 | The shorter method, by category of property |
| $250,000 or more | The detailed method, property by property |
| $100,000 or less the whole year | No T1135 required |
The detailed method asks for the country, the cost, the highest cost during the year, the year end cost and the income earned. Keep the purchase documents and foreign statements that back these up. If records are where the gaps show up, our guide on connecting financial systems covers the six year retention rule.
When is it due and what happens if you miss it?
The CRA’s page on the Foreign Income Verification Statement gives corporations until six months after the end of the fiscal period. That is the same due date as the tax return, and it applies even if the return itself is not required. A corporation with a December 31 year end therefore files by June 30, and one with a March 31 year end by September 30.
The late filing penalty is $25 a day for up to 100 days, with a minimum of $100 and a maximum of $2,500. Take a filing that is 120 days late: the 100 day limit applies, so the penalty hits the $2,500 maximum. If the CRA finds the failure was knowing or grossly negligent, it charges $500 a month up to $12,000, and after a demand $1,000 a month up to $24,000. After 24 months of that, there can be an extra 5% of the property cost. The big numbers come from carelessness that goes on for a long time, which is why an unfiled form is worth fixing early.
Is the foreign income taxed too?
Yes, the form only reports. It doesn’t tax anything. Income from foreign property still goes into your corporate return, and the tax you pay at home depends on the type of income and whether the company qualifies for the small business rate. Our corporate tax calculator estimates tax on active business income. For example, $100,000 of qualifying income in Ontario comes to $11,696 of combined tax at its calendar 2026 blend of rates. That tool doesn’t handle foreign tax credits or passive income rules, so it doesn’t answer a foreign investment question by itself.
If the owner takes the money out, that’s another layer. The dividend tax calculator shows what a shareholder pays on it, and the capital gains calculator helps if the foreign property is sold. The calculators use a 50% inclusion rate, and the proposed increase was cancelled in the federal announcement of 21 March 2025, so check the CRA’s current capital gains page before you file.
What if you find out you should have filed?
Don’t sit on it. File the missing forms as soon as you can, because the penalty clock keeps running on each day of delay, and ask your accountant whether a voluntary disclosure makes sense for older years. Gather the cost records first, since the form needs the highest cost during the year and the year end cost for each property.
Common mistakes with foreign property
Using market value instead of cost is the usual one. Forgetting an account that was open for a week is next. Third, treating a personal holding as business property. Fourth, filing the personal T1135 and assuming the corporation is covered. It isn’t, because each filer reports its own property.
A related form, T1134, exists for foreign affiliates. It’s a separate filing outside this page, and shares in a foreign affiliate are not specified foreign property for the T1135.
Sources, and how we checked them
The thresholds, due date and penalties come from the Canada Revenue Agency pages on Form T1135 and its penalties. Corporate rates in the calculator come from CRA and provincial data for 2026. This site is independent and no government body reviews it.
Frequently asked questions
What is the T1135 threshold for a corporation?
Specified foreign property that cost more than $100,000 at any time in the year. Cost is what counts, not market value.
When is the T1135 due for a corporation?
By the due date of the corporation's tax return, which the CRA puts at six months after the fiscal year end.
What is the penalty for filing late?
The greater of $100 or $25 a day, up to $2,500. Knowing or grossly negligent failures cost more, up to $12,000 and higher after a CRA demand.
Is property used in an active business reported?
Property used or held exclusively in carrying on an active business is excluded from specified foreign property.
Does a personal T1135 cover my company?
No. Each filer reports its own specified foreign property.
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