CRA forms
Form T106 Explained: Transactions With Related Non Residents
$1,000,000in total transactions with related non residents in a year, above which a Canadian business has to file Form T106.
Sources checked October 20263 min read
Who files Form T106
Form T106 is the CRA's information return for transactions with related parties outside Canada: a Canadian subsidiary buying goods from its foreign parent, a Canadian company paying management fees to a sister company abroad, or an owner's foreign company lending money to the Canadian one. It is required once the total of those reportable transactions, for all the non residents together, is more than $1,000,000 in the year. A revised version applies to 2025 and later tax years.
Corporations, partnerships, trusts and individuals can all have to file. A partnership files one return for itself, not one for each partner. Dealings between a Canadian corporation and its own foreign branch are not reported, because the corporation and its branch are the same person, but the branch's dealings with a related party are.
Key points
- Reports transactions with non residents the business does not deal with at arm's length
- Required once those transactions total more than $1,000,000 in the year
- One summary, plus a slip for each non resident
- Late filing costs the greater of $100 and $25 a day, for up to 100 days, per slip
What goes on the return
Each filer completes one T106 Summary and a separate slip for each non resident it dealt with. A slip identifies the non resident and the relationship, sets out the transactions by type, such as sales, purchases, services, rents, royalties, interest and loans, and asks whether the business has prepared the transfer pricing documentation the Income Tax Act expects.
Under a CRA policy, transactions with a particular non resident that total less than $100,000 in the year do not need the detail in Part III of that slip, though the slip itself is still filed when the overall total passes $1,000,000.
Due dates
The T106 is filed separately from the income tax return, never attached to it. Corporations and partnerships can file it electronically; individuals and trusts file on paper.
| Filer | Due |
|---|---|
| Corporation | Six months after the end of the tax year |
| Partnership | The due date of its partnership information return |
| Trust | 90 days after the end of the tax year |
| Individual | April 30, or June 15 where the individual or their spouse is self employed |
Penalties
Each late slip is its own failure: the penalty is the greater of $100 and $25 a day, for up to 100 days. Knowingly failing to file, or ignoring a CRA demand to file, draws penalties of $500 or $1,000 a month, up to $12,000 or $24,000, and a return with false statements or omissions can cost $24,000.
Quick answers
Does a Canadian subsidiary of a US company file Form T106?
Yes, if its transactions with its US parent and other related non residents total more than $1,000,000 in the year.
Is the T106 attached to the T2?
No. It is filed separately, by the same due date as the T2 for a corporation.
What if dealings with one related company are small?
Below $100,000 in the year with a particular non resident, the detail in Part III of that slip can be left out, but the slip is still filed if the overall total passes $1,000,000.
Related pages
Official sources
Call or email and we will tell you which records we need and what the work costs, in writing, before anything starts.
Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.