What is the penalty for filing a T1134 supplement late?
The exposure on this kind of return is charged by reference to the form and the length of the delay rather than to the tax, so a group with nothing to pay can still face a meaningful charge for an unreported period. For context on the CRA's ordinary late-filing charge, for the 2025 tax year a return with a balance owing attracts 5% of that balance plus 1% for each full month it is late, to a maximum of 12 months. Confirm the figure that applies to your own periods before budgeting for it, and treat the delay as the part you can still reduce.
We filed the main return but missed a supplement — is that late?
Treat that affiliate as unreported. The supplement is the part of the filing that carries an affiliate's own figures, so a group with more than one affiliate has not finished reporting until each of them has a set of schedules. A missing one is not a formatting problem; it means an entity nobody reported, and it is fixed by filing that affiliate's schedules for each period concerned. Check the ownership chart at the same time, because a supplement missed for one entity is very often a symptom of an entity list that was never complete.
Does each missing affiliate count separately for late filing?
Work on the basis that it does, because the unit of reporting is the affiliate. Each foreign entity is reported on its own set of schedules, in its own currency, with its own classification of income, so a group that has missed several affiliates has missed several pieces of reporting rather than one. That is what makes late reporting in this area scale with entity count instead of revenue. It is also why settling the affiliate list from an ownership chart, before anything is filed, earns its time — a submission that leaves an entity out invites the same conversation twice.
Does being late twice in three years raise the penalty?
Not by repetition alone. The higher rate applies where the CRA has issued a demand to file and has charged a late-filing penalty in any of the three preceding tax years. Where it applies, for the 2025 tax year the ordinary 5% plus 1% for each full month to a maximum of 12 months becomes 10% plus 2% for each full month to a maximum of 20 months — a higher rate running over more months, which is not the same as doubling. The number of affiliates whose schedules are outstanding does not itself move the rate; a demand and a penalty in the earlier years do. So check the correspondence file for both before accepting the higher figure.
Can we file missing affiliate schedules for earlier years now?
Yes, and the sequence is what stops the exercise repeating. Fix the affiliate list first, from ownership documents rather than from the finance team's recollection, because a submission that misses an entity has to be reopened. Obtain entity-level figures for each affiliate and period, since consolidated accounts will not support the schedules. Then file period by period from the oldest. A written account of how the reporting came to be missed goes with the filings, and supports a request that penalties and interest be cancelled.
Do we have to file late schedules for a dormant affiliate?
Yes. Reporting turns on the facts of ownership rather than on whether the entity did anything, so a dormant affiliate has unreported periods in exactly the way a trading one does. These are the entities most often missed, because nothing about them generates paperwork. Reconstructing a dormant affiliate's periods is slow in an unglamorous way: registry filings, bank statements and old resolutions, assembled to support schedules that will mostly record that nothing happened. It is still the cheaper path, and it makes the following periods routine rather than another reconstruction.
What is a permanent establishment, and how easily do we create one?
A taxable presence in another country under the treaty — typically a fixed place of business such as an office, branch, factory or workshop, or a dependent agent habitually concluding contracts on your behalf. Some treaties add a services test measured in days. Purely preparatory or auxiliary activity is excluded, but that carve-out is narrower than it sounds: one senior employee working from home in the other country, with authority, has been enough. See business profits and permanent establishment.
Do I pay tax twice on a foreign dividend?
Not at full rates if the relief is claimed. The paying country usually withholds at source, capped by treaty where one applies and the paperwork is in place; your residence country then taxes the dividend and credits the foreign withholding against its own charge. Where the withholding exceeded the treaty rate because no declaration was filed, the excess is recovered from the paying country, not credited at home. See the dividends article.
