When does a corporation have to file a T106, and when is it due?
In 2026 the T106 threshold is $1,000,000: a corporation files one for any tax year in which its reportable transactions with nonresidents it doesn't deal with at arm's length total more than that. It files a summary plus one slip per nonresident, due six months after year end, separately from the T2. Late slips cost up to $2,500 each.
Who has to file a T106, and what counts toward $1,000,000?
A reporting person files a T106 when its reportable transactions with nonresidents it doesn't deal with at arm's length (and partnerships those nonresidents belong to) total more than $1,000,000 in the year, measured at fair market value laws-lois.justice.gc.ca. A reporting person is a corporation, trust or individual resident in Canada at any time in the year, or a nonresident carrying on business in Canada other than through a partnership. Partnerships with a Canadian resident member, or carrying on business in Canada, have the same test.
The CRA applies the test to every nonresident combined: your client files if the Box I amounts on all its slips add up to more than $1,000,000 canada.ca. Box I isn't just sales. It totals boxes A, B, C, D, G and H, so loan and investment movements count too.
| T106 slip part | What goes in it | Counts in Box I? |
|---|---|---|
| Part III: transactions | Goods, rents, royalties, services, interest, dividends, reimbursements (revenue column A, expenditure column B) | Yes |
| Part IV: indebtedness and investments | Loans owed each way, ACB of the investment in the nonresident, PUC held by the nonresident (totals C and D) | Yes |
| Part V: derivatives | Revenue and expenditure on swaps, forwards, options and fees (G and H) | Yes |
| Part V: contract count and notional amount | Boxes E and F | No |
| Part VI: current accounts | Payables and receivables with the nonresident | No |
There's a second, smaller threshold. When transactions with one particular nonresident are under $100,000 for tax years beginning in 2022 or later, you can skip Part III for that nonresident, but you still file its slip to report the other information canada.ca. For years beginning before 2022 that cutoff was $25,000.
When is the T106 due?
The T106 follows the filer's own filing due date under ITA 233.1(2) and (3), and the CRA spells out each date in its instructions canada.ca.
| Filer | T106 due | Year end December 31, 2025 |
|---|---|---|
| Corporation | Six months after the end of the tax year | June 30, 2026 |
| Partnership | The T5013 due date under section 229 of the Income Tax Regulations | Same day as its T5013 |
| Trust | 90 days after the end of the tax year | March 31, 2026 |
| Individual | April 30 after the calendar year | April 30, 2026 |
| Individual who runs a business, or whose spouse does | June 15 after the calendar year | June 15, 2026 |
For a short tax year, the T106 is due with that year's T1, T2, T3 or T5013. File it separately: the CRA says not to attach it to the income tax return canada.ca. Corporations can EFILE it for 2015 and later tax years, partnerships can EFILE or NETFILE for 2017 and later fiscal periods, and individuals and trusts must paper file with the Winnipeg Taxation Centre. The partnership date is the one on the T5013 page.
Use the 2025 version of the form for tax years beginning after 2024, and the version released March 3, 2022 for earlier years canada.ca. An amended return goes on the same version as the original, and it has to be the entire package again, not just the changed slip.
What are the T106 penalties?
Late filing falls under 162(7), and the CRA's instructions say it may assess a separate penalty for each late slip canada.ca. The tougher penalties need a knowing failure or gross negligence
laws-lois.justice.gc.ca.
| Situation | ITA section | Penalty | Ceiling |
|---|---|---|---|
| Filed late | 162(7) | Greater of $100 and $25 a day, counting up to 100 days | $2,500 per slip |
| Knowing or grossly negligent failure to file | 162(10) | $500 a month unfiled, up to 24 months, less the 162(7) penalty | $12,000 |
| Same, after ignoring a demand under section 233 | 162(10) | $1,000 a month unfiled, up to 24 months, less the 162(7) penalty | $24,000 |
| Still unfiled after 24 months | 162(10.1) | Doesn't apply to a T106 | None |
| False statement or omission, knowingly or grossly negligent | 163(2.4)(a) | Flat amount | $24,000 |
The 162(10.1) row is where the T106 parts company with the T1135. That subsection adds 5% of cost after 24 months for foreign property and foreign affiliate returns, but it expressly excludes a return required under section 233.1 laws-lois.justice.gc.ca. The CRA's instructions describe the $24,000 penalty as applying to incomplete or incorrect information, but 163(2.4)(a) itself only bites when the false statement or omission was made knowingly or with gross negligence
laws-lois.justice.gc.ca. See the T1135 penalty page for the comparison, and the Voluntary Disclosures Program if a client has missed several years.
Worked example: does this subsidiary file, and what does a late return cost?
Your client is a Canadian corporation with a December 31, 2025 year end, owned by a US parent. A German sister company is also under common control. During 2025:
| Transaction | Nonresident | Slip part | Amount |
|---|---|---|---|
| Inventory bought from the parent | US parent | Part III, expenditure | $700,000 |
| Management fees paid to the parent | US parent | Part III, expenditure | $150,000 |
| Interest paid on the parent loan | US parent | Part III, expenditure | $80,000 |
| New advance on the parent loan | US parent | Part IV, increase | $200,000 |
| Consulting sold to the sister company | German sister | Part III, revenue | $60,000 |
| Total reportable transactions | Both | $1,190,000 |
The Part III dealings come to $990,000, under the line. The $200,000 loan advance pushes the total to $1,190,000, so your client files a T106 for 2025: one summary and two slips. The German slip is under the $100,000 de minimis, so its Part III stays blank, but the slip itself still goes in.
The return is due June 30, 2026. Say it goes in 40 days late, on August 9, 2026, with nothing deliberate about it.
| Step | Amount |
|---|---|
| Days late (capped at 100) | 40 |
| $25 times 40 days, per slip | $1,000 |
| Compare with the $100 minimum | $1,000 is higher |
| Slips filed late | 2 |
| Possible 162(7) penalties | $2,000 |
Filed 100 or more days late, the same two slips could cost $5,000.
Edge cases that trip up a T106
Branches. A Canadian branch of a foreign corporation doesn't report notional dealings with its own head office, because the corporation and its branches are the same person. Transactions between the branch and another party it doesn't deal with at arm's length still go on the reporting person's T106 canada.ca.
Series with an arm's length party. If your client and a related nonresident take part in a transaction or series, and as a result an amount is paid to or received from an arm's length entity, the CRA wants that amount reported too canada.ca.
Partnerships. A reporting partnership files one T106 for the partnership, not one per partner. Barter, swaps, discounts and anything given for nil consideration are separate yes or no questions in Section 3 of the summary, so they can't be left off just because no cash moved canada.ca.
Transfer pricing. Question 9 on every slip asks whether you prepared or obtained contemporaneous documentation under 247(4) for that nonresident. As of October 2026, the consolidated Act (amended in 2026) requires those records within 30 days after a written CRA request, so check which tax years the amendment covers before relying on an older deadline laws-lois.justice.gc.ca. More on that in transfer pricing documentation.
Currency. Report in Canadian dollars, rounded to the dollar, unless the corporation has elected under 261(3)(b) to report in a functional currency, in which case the summary asks for the currency code (AUD, USD, GBP, EUR or JPY) canada.ca.
Sources
Does a corporation file if the total is exactly $1,000,000?
No. Section 233.1(4) only requires the return when the total is more than $1,000,000, so $1,000,000 on the nose doesn't trigger it laws-lois.justice.gc.ca.
Does a Canadian corporation owned by a US individual have to file?
Yes, if its reportable transactions with that shareholder and any other nonresidents it doesn't deal with at arm's length total more than $1,000,000. The nonresident on the slip can be an individual, and Part III covers dividends, interest and management fees paid to them canada.ca.
Can I EFILE an amended T106?
Only if the original went in electronically. If the original was paper filed, the amended return has to be paper filed too, marked "AMENDED", "CANCELLED" or "ADDITIONAL", or explained in a cover letter canada.ca.
Does the 5% penalty after 24 months apply to a T106, like the T1135?
No. Subsection 162(10.1) excludes returns required under section 233.1, so a knowing failure on a T106 tops out at $12,000, or $24,000 after a demand laws-lois.justice.gc.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.