Missed T1134 for your US company: penalty, relief, catching up

Does my US company or LLC need T1134, or only T1135?

You need T1134 for a US company that was your foreign affiliate at any time in the year: a non-resident corporation in which your equity percentage is at least 1% and you plus related people hold at least 10% (section 95(1), section 233.4). T1135 is not a substitute: foreign affiliate shares and debt are excluded from its specified foreign property (section 233.3). A smaller stake is not a foreign affiliate and is a T1135 question instead; see foreign property and affiliate reporting. A Quebec resident also files Revenu Québec's foreign property return (TP-1079.8.BE-V) for years ending after December 30, 2025, but like T1135 it leaves out foreign affiliate shares and debt, so it does not replace T1134 (Québec Taxation Act, s. 1079.8.15.8).

Check the company's Canadian tax residence first. Canadian law can treat a US-formed company as resident in Canada when its central management and control is exercised here (CRA: Corporate residence). A US corporation created only under US law and taxed in the US is treated by the Canada-US treaty as resident only in the US (Article IV(3)), and section 250(5) deems it non-resident of Canada, so it generally remains a foreign affiliate and T1134 applies. A company created under both countries' laws needs a closer look; see Canadian owner of a US corporation.

The CRA treats a US LLC as a corporation even when the US taxes its owner directly (CRA: Paragraph 88). That treaty tie-breaker may not help an LLC that is not itself taxable in the US, because the treaty does not treat it as a US resident (Treasury Technical Explanation). An LLC managed from Canada may then be resident in Canada, which means a T2 return and no T1134. For the LLC ownership test and other filings, see Canadian owner of a US LLC.

Who files the missing T1134: me, my Canadian corporation, or both?

The Canadian-resident owner of the US company files T1134; the US company does not. Trace the ownership for each missing year. Where Canadian corporations are related, the CRA says only the lowest-tier Canadian corporation reports its foreign affiliate (CRA: T1134). For tax years that begin after 2020, related owners, individuals included, may instead agree to file one T1134 as a group if they share a year-end and report in the same currency. The choice stays fixed for that year once filed, and each member is still assessed late-filing penalties as if it had filed alone (CRA: Form T1134 instructions). Before counting missing returns, check which entity actually filed.

These rows follow section 233.4. An individual has a specific exemption for the year they first became resident in Canada. That exemption does not extend to a Canadian corporation they own (section 233.7).

When was each year's T1134 due, and how late am I?

T1134 is currently due within 10 months after the Canadian reporting owner's year-end. For a December 31 year-end, that is October 31 of the next year. Use the historical deadline for each missing year, rather than applying today's deadline to every return.

The CRA's T1134 information page gives these periods; section 233.4(4) states the current rule.

For each reporting owner, list the year-end, due date, form version and filing status. The US company's year-end does not replace the owner's. A deemed year-end starts another year with its own return and due date, for example when someone acquires control of your Canadian corporation or it stops being a Canadian-controlled private corporation (section 249).

My US company is dormant or tiny: did I still have to file?

Small is not the same as dormant. Section 233.4 has no small-company exemption; the relief is a CRA administrative policy, and it applies only when your cost of the interest is under a limit and the affiliate is dormant or inactive for the year. Test each missing year against the policy for that year (CRA: Administrative policies).

An active company with modest sales does not qualify. For the supplement rules, see foreign property and affiliate reporting.

A company formed, bought or sold during the reporting year can still need reporting without an affiliate year-end in that period (CRA: T1134 questions and answers). Closing the company now does not resolve an earlier missed report.

What is the penalty for each missed year, and when does it get worse?

The ordinary late-filing penalty for a T1134 is C$25 per day, for up to 100 days, with a minimum of C$100 and maximum of C$2,500. The obligation can carry a penalty even when no income tax is owing (CRA: Penalties, section 162(7)). A return more than 100 days late is at that maximum: filing later adds no more ordinary penalty, but the return is still owed.

Assess each missing year on its own. Section 233.4 asks for a return "in respect of each foreign affiliate", and the CRA's penalty table does not say how the daily penalty is counted for several affiliates, so confirm the count of required returns before estimating a total. In a group filing, each member is assessed as if it had filed its own returns.

Knowing or grossly negligent failure to file costs C$500 a month for up to 24 months, at most C$12,000, less the late-filing penalty already charged. Knowingly or grossly negligently ignoring a formal CRA demand to file doubles the monthly rate to C$1,000, at most C$24,000, less penalties already charged. If either applies and the return is still missing after 24 months, a further 5% of the highest cost of your shares and debt in the affiliate is added, less the penalties above (section 162(10)–(10.1)). Time alone does not trigger these: being that late does not by itself make a failure knowing.

For the full penalty grid, including false statements and omissions, see foreign reporting penalties.

In what order do I catch up, including T106 and amended returns?

Choose the filing and relief route first, then prepare the missing years from oldest to newest. Working forward helps reconcile ownership, loans and balances; it is a practical order, not a statutory deadline.

1. Identify the reporting owners and missing periods. Check Canadian residence, foreign affiliate status, exemptions and any filings already made.
2. Read every CRA letter and note its response date. A formal demand to file under section 233 sets its own deadline, a reasonable time stated in the demand, and knowingly or grossly negligently ignoring it carries a higher penalty. A demand, assessed penalty or audit can also change the available relief route.
3. Reconstruct the oldest year's records, then carry forward. Reconcile share purchases, contributions, distributions, loans and ownership changes.
4. Prepare the summary and one supplement for each foreign affiliate, including any the US company owns. Use the version applicable to that period from the CRA's T1134 form page. An individual files each T1134 separately from the T1: electronically (EFILE or NETFILE) only for 2021 and later tax years, on paper for earlier years. A corporation can EFILE for 2015 and later tax years (CRA: T1134 supplement package).
5. Review related Canadian returns together. Filing T1134 does not itself amend a T1 or T2. The CRA can reassess amounts relating to a foreign affiliate up to three years after the normal reassessment period ends (section 152(4)). Whether the US company's profit was foreign accrual property income (FAPI) is a separate question; owning a company abroad explains when profit is FAPI (section 91).
6. Keep copies and submission evidence. Track each owner's returns, amendments and CRA responses by period.

Transactions with a related non-resident, such as your US company, can require a separate T106, but only when the year's total with non-arm's-length non-residents exceeds C$1,000,000. It is due by your filing-due date for the year, earlier than the T1134 (section 233.1). Its tests are in foreign property and affiliate reporting.

I cannot get the US company's books: what do I file?

Missing T1134 information needs disclosure and documented efforts to obtain it. Leaving substantial information blank without explanation can mean the CRA treats T1134 as unfiled (CRA: Penalty application).

The due diligence exception requires reasonable disclosure of unavailable information, efforts to obtain it before filing, and submission within 90 days after it becomes available. For a controlled foreign affiliate, the statute also asks whether sufficient information could reasonably have been expected when the relevant transactions occurred (section 233.5). The section relieves the missing information, not the due date, so it does not by itself remove the late-filing penalty.

Use Part IV of the supplement to explain what is missing, why, and the steps taken. The return must include the affiliate's own financial statements and notes for each controlled foreign affiliate, which includes a wholly owned US company, and for each affiliate where you hold at least 20% of the voting interest. Consolidated group statements do not satisfy that requirement (CRA: Financial information).

Can the CRA cancel the T1134 penalty?

The CRA can waive or cancel penalties through taxpayer relief, but cancellation is discretionary. Relief needs a qualifying circumstance, for example a disaster, serious illness or accident, serious emotional or mental distress, or a CRA error or delay. Not knowing about a filing rule is not among the examples IC07-1R1 lists, and the guidelines are not binding, so a request should explain honestly how the filing was missed and what was done once it was found. An accountant's error does not automatically excuse the owner.

Where a qualifying circumstance exists, the CRA also weighs compliance history, care taken and how quickly the omission was corrected. A penalty relief request must come within 10 years after the end of the calendar year in which the relevant tax year ended; interest relief reaches only interest that accrued in the 10 calendar years before the year of the request (IC07-1R1, paragraphs 13–15.3, 23–26, 33–35).

The request goes on Form RC4288 (IC07-1R1). For its structure and supporting evidence, see requesting relief for missed foreign reporting. If the penalty assessment itself is wrong, check objection rights as well as relief; those are different procedures. A notice of objection has its own deadline: 90 days from the date of the notice for a corporation, and for an individual the later of 90 days from the notice and one year after the return's filing due date. Do not wait for a relief decision before checking that deadline (CRA: Objection rights).

Should I use voluntary disclosure, and is a corporate owner different?

Both individuals and corporations can apply to the Voluntary Disclosures Program, on Form RC199, signed by the taxpayer or an authorized representative. A missed information return can qualify even without omitted income, if applicable penalties and the other eligibility conditions exist. The application must include a tax year at least one year past its filing due date. Any estimated tax owing must be paid, or a payment arrangement requested. VDP is not the route to cancel penalties already assessed (CRA: VDP eligibility).

Decide before you file the missing returns directly: a penalty the CRA then assesses is a taxpayer relief question, not a VDP one. An unprompted application, made with no CRA contact about an identified compliance issue other than general education letters, gets 100% penalty relief and 75% interest relief. A prompted application gets 25% interest relief and up to 100% penalty relief. The tax stays payable, and all known errors and omissions must be disclosed, not only the T1134 (CRA: Changes to VDP).

An audit or investigation of you or a related taxpayer about the same information prevents the application from being voluntary, so an audit of your corporation can affect your own application, and the reverse (IC00-1R7, paragraphs 17–20, 24–26).

For individual eligibility, how far back to disclose and application steps, see unreported income and voluntary disclosure; for a Canadian corporate owner, see corporate reviews, audits and voluntary disclosure.

Does the US company also owe missed US filings?

Canadian catch-up does not correct US filings. A US corporation generally files Form 1120 even without taxable income (IRS: Form 1120 instructions). If a foreign person holds at least 25% of the corporation, it also attaches Form 5472 in any year with reportable related-party transactions, such as loans or payments between you and the company. A foreign-owned single-member LLC that is disregarded for US income tax can owe Form 5472 with a pro forma Form 1120 on the same basis; owner contributions and distributions can count (IRS: Form 5472 instructions).

A disregarded LLC's income is reported on its owner's own US return. A foreign individual engaged in a US trade or business files Form 1040-NR even with no US-source income (IRS: Form 1040-NR instructions), and a foreign corporation in that position files Form 1120-F (IRS: Form 1120-F instructions). The tests are in foreign-owned single-member LLC filing and foreign-owned C corporation filing; for a missed Form 5472 or an IRS penalty notice, see missed foreign-owner filings and penalties.

When should I get help, and what should I gather?

Get help before filing if any of these applies: foreign income may have been left off your return, there are several affiliates or owners, you have received a CRA letter, or filings are missing in both countries. Owning a company abroad covers FAPI and what to review first after missed T1134 filings.

Gather:

• The share register, formation documents and ownership chart
• The US company's separate financial statements and tax returns
• Records of money moved between you and the company
• Your Canadian T1 or T2 returns, prior information returns and filing receipts
• All CRA or IRS letters
• A dated note of when you found the omission and what you did to retrieve missing records

Example

All figures are illustrative and in Canadian dollars. A Canadian-resident individual owns an active US LLC outright and never filed a T1134. Assume the LLC is not resident in Canada, so it is a foreign affiliate. The tax years are calendar years beginning after 2020, so each annual return was due October 31 of the next year. Three returns are missing, and each is now more than 100 days late.

Assume only the ordinary late-filing penalty applies, with no exemption or relief. The calculation is C$25 per day for 100 days, or C$2,500 for each annual return. Three returns produce C$7,500. That illustration excludes higher penalties, interest and any tax from omitted income (section 162(7)).

Before filing, the owner checks voluntary disclosure, since a penalty already assessed is outside it. If the CRA accepts an unprompted application, the program relieves 100% of these penalties; filing directly leaves them to a discretionary relief request. The owner then reconstructs the oldest year's records and carries them forward.

Different for you?

• You are unsure how Canada treats your LLC: see Canadian owner of a US LLC.
• Your US corporation may be managed from Canada: see Canadian owner of a US corporation.
• You already received a foreign-reporting penalty: see the penalty-relief request process.
• You personally omitted foreign income: see individual voluntary disclosure.
• Your Canadian corporation has missing reports or a CRA letter: see corporate reviews, audits and voluntary disclosure.
• The US company missed Form 5472 or has an IRS notice: see missed foreign-owner filings and penalties.
• Several affiliates, FAPI, missing years or filings in both countries need reconciliation: use cross-border tax, with the ownership records, returns and government correspondence ready.