Introduction and purpose
Effective October 1, 2025 there will be changes in Canada’s Voluntary Disclosures Program (VDP). The changes may make it easier to correct mistakes related to Form T1135. A general description of the new program is here
Form T1135 – Some background.
In 2019 I wrote a series of posts about Canada’s T1135 requirement. In simple terms, Canada’a T1135 form is where tax residents of Canada report their “Foreign Property” to the Canada Revenue Agency. Form T1135 is a combination of the U.S. FBAR and Form 8938 requirements. “Foreign Property” is defined in S. 233.3(1) of the Income Tax Act of Canada. A summary from the Canada Revenue Agency is here. It would be prudent for all tax residents of Canada to read this carefully. The penalties for failure to file Form T1135 are significant. Notably the requirement to file Form T1135 is independent of whether any taxable income is generated from the foreign property. It is likely that there are many tax residents of Canada who are unaware of this requirement.
Historically, fixing T1135 noncompliance has been achieved through Canada’s “Voluntary Disclosures Program”.
Prior to October 1, 2025 – A general description of the Voluntary Disclosures Program
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/ic00-1/ic00-1r6-voluntary-disclosures-program.html
From October 1, 2025 – Canada’s new Voluntary Disclosures Program – Correcting unintentional filing errors and omissions such as Form T1135
Effective October 1, 2025 the Canada Revenue Agency will be administering a new and simplified “Voluntary Disclosures Program (VDP)”. Generally the program will be more accessible than in previous years. The announcement is here. The Canada Revenue Agency description is here.