Canada's Foreign Transaction Reporting Rules—A Canadian Tax Lawyer Analysis

Introduction

The Canadian Income Tax Act contains five basic rules requiring a Canadian resident to report either a transaction involving a foreign party or an interest in foreign property:

• Section 233.1 requires a Canadian resident to file a T106 if the resident entered a business transaction with a related non-resident.
• Section 233.2 requires a Canadian resident to file a T1141 if the resident transferred or loaned property to a non-resident trust or similar entity.
• Section 233.3 requires a Canadian resident to file a T1135 if the resident owns or has an interest in "specified foreign property."
• Section 233.4 requires a Canadian resident to file a T1134 if the resident has a "foreign affiliate."