In June 2013, the CRA made important revisions to Form T1135, the Foreign Income Verification Statement. The changes were aligned with the objectives of the Canadian government’s 2013 Economic Action Plan, specifically intended to crack down on international tax evasion and aggressive tax avoidance.
Form T1135 must be filed by most Canadian-resident individuals, corporations or trusts that, at any time during a year, owned specific foreign property valued at a total of more than $100,000.
By revising the form, the CRA now requires taxpayers to provide more detailed information for each specified foreign property.
However, to ease the transition to the new reporting requirements, on February 26, 2014, the CRA announced a simplified form for taxpayers and extended the filing deadline to July 31, 2014. This should allow those concerned to meet the CRA’s expectations this year. However, it should be noted that this transitional reporting method applies to the 2013 taxation year only, and that in 2014, taxpayers will be required to collect extensive information in order to properly complete Form T1135.
You are reminded that penalties can be financially harsh for not filing, late filing or providing incorrect information. Please see the CRA Table of Penalties for more information in this regard.
If these changes affect you, please call on our experts. Further information is available from any of our offices.