What is a T1134 Information Return Relating to Foreign Affiliates?
What is a T1134 Information Return Relating to Foreign Affiliates? March 24, 2022 Tax Question: What is a T1134 information return relating to controlled and
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Tax Question:
What is the tax treatment of foreign investment income in a corporation?
Facts:
In an increasingly integrated global market, many corporations are choosing to invest their money in foreign markets. Whether they choose to invest in shares of a corporation or in real property, all income from the investments must be reported on their Canadian corporate tax return.
The type of investment income received from a foreign investment property can vary.
In addition to being taxed on foreign investment income, there are various other tax disclosure forms that need to be completed for foreign investments. Two common tax disclosure forms are T1135 Foreign Income Verification Statement (if a corporation owns more than $100,000 Canadian of foreign property at any time during the year) and T1134 Information Return Relating to Controlled and Not-Controlled Foreign Affiliates (for reporting interests in foreign affiliates, whether controlled or not). If a corporation had foreign taxes withheld or paid on foreign investment income, the corporation will generally receive a foreign tax credit towards the Canadian taxes payable. This is to reduce the double taxation of the same income.
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Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.
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