Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Various Questions Relating to T1134 Reporting (for 2021 and later taxation years).
Position: General comments provided. See below.
2022 CTF Annual Conference
CRA Roundtable
Question 12: T1134 Reporting
A. Various Questions Relating to T1134 Reporting (for 2021 and later taxation years)
(i) Part I Section 3E – Lower tier non-controlled foreign affiliates (Table)
Column 6 of the table asks, “Were there any transformation transactions during this reporting period that impacted its surplus account balance(s)?”. The term “transformation transactions” is not defined with sufficient clarity. The term also appears in the context of Part II Section 3B regarding surplus accounts with more specific questions.
Can the CRA provide more guidance on the meaning of this term?
(ii) Part II Section 1D – Foreign Affiliate Dumping Rules (Table)
Where a corporation resident in Canada is not controlled by a non-resident such that the conditions in subsection 212.3(1) are not met, should this table be left blank?
(iii) Part II Section 3A – Surplus Accounts – 4. Upstream Loan Rules (Table)
Column 2 of the Table requires reporting entities to identify if a specified debtor (as defined in subsection 90(15)) owes an amount to the foreign affiliate (or a partnership of which the foreign affiliate was a member) at any time during the reporting period. If so, columns 3 and 4 require the reporting entities to indicate if subsections 90(6) or 90(8) apply to that debt. As the application of subsection 90(6) or paragraph 90(8)(a) may not be confirmed until after the T1134 information return is required to be filed, the reporting entities may not have a firm answer as to the application of subsection 90(6)/paragraph 90(8)(a).
Can the CRA provide guidance as to how the reporting entities should respond to columns 3 and 4 in such an instance?
B. T1134 Missing Substantial Information (for 2021 and later taxation years)
In technical interpretation 2019-0791541I7 the CRA indicated that an information return that is missing substantial information will be considered invalid, and therefore, will not be considered to have been filed. Can the CRA provide examples of what it would consider to be “substantial information” on the T1134 information return?
CRA Response
To assist taxpayers in preparing the T1134 information return, the CRA maintains a question and answer webpage titled “Questions and answers about Form T1134” - Canada.ca (the “Q&A Page”). The Q&A Page provides additional instructions regarding how to complete the information return in certain situations.
Over the past year the CRA has received a number of requests from different members of the tax community for guidance in respect of situations not covered by the Q&A Page. The CRA is currently working to update the Q& A Page to provide responses to those questions as well as to the above Roundtable questions.
Komal Patel
2022-095059
November 29, 2022
Response prepared by:
Jess Johns
International Technical Issues Section
International and Large Business Directorate
Compliance Programs Branch
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