Since 2005, the firm's partners have provided foreign asset reporting services to more than 1,800 Chinese clients and over 5,800 non-Chinese immigrants across the Greater Vancouver Area, Calgary, and the Greater Toronto Area.
The reporting timelines are divided into individual reporting and foreign affiliate reporting.
The filing deadline is the same as the personal income tax return. Individuals without self-employment income must pay taxes and file the T1 return by April 30. Tax residents who believe no tax is payable or who expect a refund technically have no filing deadline for the T1 return; however, if foreign assets are involved, the foreign asset reporting form must still be filed according to the applicable tax-filing timeline to avoid late-filing penalties. Individuals with self-employment income may file both the T1 return and the foreign asset reporting form T1135 together by June 15.
New immigrants are not required to report foreign affiliates in their first year of tax filing. However, within 15 months after the end of the second tax year, if you own more than 10% of a foreign affiliate outside Canada, you must report the foreign affiliate to the Canada Revenue Agency (Form T1134). For example, if you landed in Canada in August 2016, the second tax year refers to January 1 to December 31, 2017. Fifteen months after the end of that tax year would place the reporting deadline on March 31, 2019. However, reporting is not required if the investment cost of the enterprise is less than CAD $100,000 and the enterprise is dormant, with total assets under CAD $1,000,000, or annual gross revenue under CAD $25,000.
If you own total assets outside Canada exceeding CAD $100,000 (including cash deposits, stocks, debt instruments, trust investments, and real estate), you are required to report foreign assets.
Reporting foreign assets does not require you to pay asset tax. It is simply a declaration of how many assets you own overseas, and you may choose to transfer these assets into Canada at any time. Tax may only be payable if the foreign assets generate income or are sold at a gain.
In simple terms, you should prepare a list of your personal foreign assets, including cash deposits, real estate, equity interests, debt instruments, and fund/stock/trust investments. This list serves as a summary. Each item must be supported by relevant evidence, such as notarization and professional valuation, to substantiate the existence and value of the reported foreign assets. The main purposes are:
For short-term landing immigrants, from the first date of landing in Canada you become a permanent resident. However, if you return to your home country immediately after landing and do not establish significant residential ties in Canada, you are not yet considered a Canadian tax resident (you remain a non-resident for tax purposes and therefore do not need to file tax returns or report foreign assets). For long-term landing immigrants, once you establish significant residential ties in Canada, especially by residing in Canada for more than 183 days per year, you will be considered a tax resident and must file tax returns.
Many immigrants continue to hold foreign assets acquired before becoming Canadian residents. For foreign asset reporting, the tax law clearly states that the cost base of such assets is determined by their fair market value on the date you became a Canadian resident. This cost is referred to as the deemed cost. The benefit of deemed cost is that capital gains accumulated before immigration are not taxable in Canada. Therefore, to facilitate future foreign asset reporting, evidence should be collected to support this deemed cost, which will serve as the basis for reporting and for calculating capital gains when the asset is sold.
The above content outlines the foreign asset reporting requirements made publicly available by the Canada Revenue Agency. Some portions are translated materials.