RAR Consultants – Tax Court of Canada imposes penalties for failure to file T1134s respecting a foreign affiliate

In the years in question, the T1134 forms provided an exemption from the required filing where inter alia the cost amount of the taxpayer’s investment in foreign affiliates was less than $100,000. Before confirming penalties for failure to file T1134s, Bocock J rejected a submission that the value of the sole foreign affiliate investment of the taxpayer (a 28% interest in a Bermuda company) had declined by the years in question to below $100,000. He did so on factual grounds, rather than on the basis of the meaning of “cost amount,” stating that he found the assertion of such diminished value to be improbable.

Accordingly, the taxpayer was subject to s. 162(7) penalties for failure to file the T1134s.

Neal Armstrong. Summary of RAR Consultants Ltd. v. The Queen, 2017 TCC 214 under s. 233.4(4).