File Form T1135 By July 31

It’s important to file the new Form T1135 – Foreign Income Verification by July 31 this year. The Departments of Finance and CRA have been prolific in their steps to close down tax loopholes and this new form is a cornerstone of these activities. 

Approximately $16 billion in taxable income and credits have been recently identified through legislative and court action, said Minister of National Revenue, Findlay in response to the Auditor General’s Report on CRA. Since 2006, over 85 measures have been introduced to improve the integrity of the tax system, particularly as it relates to offshore activities including:

• the mandatory reporting of international electronic funds transfers over $10,000 to CRA;
• the new Foreign Income Verification Statement (Form T1135) which requires more detailed information including the names of specific foreign institutions and countries where offshore assets are located and income earned on them;
• the Offshore Tax Informant Program launched on January 15, 2014 under which rewards will be paid by CRA for “concrete details” of major international tax non-compliance that lead to the assessment and collection of additional federal taxes owing;
• ensuring that the offshore regulated bank provisions are not inappropriately used to circumvent the foreign accrual property income rules through foreign affiliates that are not part of a Canadian financial institution group.