Form T1135 Update: Streamlined reporting for 2014 and beyond

Form T1135, Foreign Income Verification Statement, has created significant challenges for taxpayers and tax preparers. Now it seems the Canada Revenue Agency (CRA) may be set to relieve some of the filing burden.

Form T1135, Foreign Income Verification Statement, has created significant challenges for taxpayers and tax preparers (see my previous blog). Now it seems the Canada Revenue Agency (CRA) may be set to relieve some of the filing burden.

Among other things, the CRA has confirmed that a streamlined reporting method will be available for 2014 and after, which would be a variation of the transitional method in place for 2013. The streamlined reporting would only be available to property held in the accounts of Canadian registered securities dealers and federally or provincially regulated trust companies.

CRA has confirmed that it will accept the 2013 version of the T1135 filed prior to July 31, 2014 for the 2014 tax year.  All forms filed after July 31, 2014 must be the new form (assuming they are filing for the 2014 or later tax years).   CRA will be updating its Q&As to indicate this.

The CRA provided this update at a June 10, 2014 stakeholder meeting organized by CPA Canada. Earlier, these stakeholders had provided input into CPA Canada’s March 2014 submission to the CRA on the topic.

The CRA also provided clarification on a number of other areas, although some changes are yet to be confirmed. These include:

  • the ability to use of fair market value reporting for property held in accounts of Canadian registered securities dealers and federally or provincially regulated trust companies
  • the ability to use the average exchange rate for the year in determining the fair market value of specified foreign property
  • the elimination of the exception for income reported on T3 and T5 forms for 2014 and later years

For details of these and other changes, read the Form T1135 Stakeholders Group meeting notes.

Join in the conversation

How satisfied are you with these developments? Are there other ways that the CRA could further streamline Form T1135 filing requirements? What other steps could the CRA take to improve the process for disclosing income from foreign investments without unduly burdening compliant taxpayers?

Post a comment below.

Conversations about Tax is designed to create an exchange of ideas on tax policy and practice developments and issues and their impact on Canadian accountants who practise tax. Comments received can provide helpful input to the public interest advocacy positions developed by the Chartered Professional Accountants of Canada.

About the Author

Gabe Hayos, FCPA, FCA, ICD.D

Vice-president, Taxation, CPA Canada