The T106 is the CRA information return for reportable transactions between a Canadian taxpayer and non-residents it doesn't deal with at arm's length, such as a foreign parent company or a related company abroad. You must file it when the total of those transactions with all such non-residents is more than CAN$1,000,000 in the year. Corporations file it six months after their tax year ends.
Everything below comes from the CRA's T106 form page and the 2025 T106 Summary and Slip instructions, as of October 2026.
Who has to file
The instructions define a reporting person as a corporation, trust or individual that's resident in Canada at any time in the year, or a non-resident carrying on business in Canada. Partnerships can be reporting partnerships too. Either one must file when its reportable transactions with non-arm's length non-residents, combined across all of them, total more than CAN$1,000,000, which means the total of all Box I amounts is over that line.
A partnership files one T106 for the partnership, not one per partner. Corporations with foreign affiliates may have other foreign reporting too, such as the T1135 for specified foreign property; the T106 is about transactions, not holdings.
The de minimis rule most people miss
Crossing the CAN$1,000,000 line doesn't mean every relationship needs full detail. Where the total transactions with one particular non-resident are below CAN$100,000 in the year, the instructions say there's no need to report them in Part III of that non-resident's T106 Slip. You still file the return because the combined total is over the threshold, but the small relationships get far less work. These figures are as of October 2026.
Due dates
| Filer | T106 due date |
|---|---|
| Corporations | Six months after the end of the tax year |
| Partnerships | Same as the partnership information return under section 229 of the Income Tax Regulations |
| Individuals | April 30 after the end of the calendar year |
| Self-employed individuals, or whose spouse is self-employed | June 15 after the end of the calendar year |
The penalties
| Penalty | Amount |
|---|---|
| Late filing, subsection 162(7) | The greater of CAN$100 and CAN$25 a day, up to 100 days, per slip |
| Failure to file, knowingly or through gross negligence, subsection 162(10) | At least CAN$500 a month, up to CAN$12,000 for each failure |
| Failure to file after a CRA demand | At least CAN$1,000 a month, up to CAN$24,000 for each failure |
| False statement or omission, subsection 163(2.4) | CAN$24,000 |
The late-filing penalty can be charged slip by slip, so a group with several related non-residents can see multiple penalties from one late return.
What changed in the 2025 version
- Use the 2025 version for tax years or fiscal periods beginning after 2024. For earlier years, the CRA prefers the version released on March 3, 2022, though the new one may be used if it helps electronic filing.
- An amended return must use the same version as the original.
- Section 2 of the Summary now asks about the ultimate parent entity and whether you're part of a multinational group that must file a Country-by-Country Report.
- The advance pricing arrangement question has gone from the Summary; a revised transfer pricing method list on the Slip includes code 7 for an APA.
- Part II of the Slip now asks what type of entity the non-resident is under foreign law, whether it's treated differently for tax in its country of residence, and the type of relationship with the reporting entity.
How to file
- Work out the total reportable transactions with each non-arm's length non-resident for the year.
- If the combined total is more than CAN$1,000,000, prepare one T106 Summary and a T106 Slip for each non-resident.
- Report amounts rounded to the nearest Canadian dollar, or functional currency unit if that applies, in Part III, gross in both columns.
- Answer the transfer pricing documentation question; subsection 247(4) relates to keeping contemporaneous documentation.
- File electronically if you can: corporations can EFILE for 2015 and later tax years, partnerships can EFILE or NETFILE for 2017 and later fiscal periods. Individuals and trusts paper-file for now.
Corporations and partnerships can also attach supporting documents, such as financial statements, to EFILED foreign reporting returns through tax software.
Where the numbers come from
Part III of the Slip is where most of the work sits. It covers sales and purchases of goods and services, rents, royalties and fees, interest and dividends, indebtedness owed to and by the reporting entity, investments in the non-resident and derivative contracts such as interest rate, foreign exchange, credit and equity contracts. Each one is reported gross, so a company that both sells to and buys from its foreign parent shows both sides rather than a net figure. Pull the numbers from the same ledgers you use for transfer pricing, so the T106 and your documentation tell the same story.
Getting help with a T106
The instructions give 1-800-959-5525 for business enquiries and 1-800-959-8281 for individual enquiries, and point you to your tax services office for detailed help with completing the form. Because a late return can be penalized slip by slip, it's worth asking early if you're unsure whether a particular non-resident is at arm's length, rather than in the week the return is due. Keep the workings that show how you reached each Box I total, too: those are what you'd need if the CRA asks how the CAN$1,000,000 test was met.
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The verdict
The T106 is a reporting return, not a tax bill, but the penalties are steep enough to treat it like one. If your company trades with a related business abroad, add up the year's transactions early, use the CAN$100,000 de minimis rule to cut the detail, and diary the six-month deadline next to your corporate return. If you're registering a new Canadian company with a foreign parent, the CRA business number is step one and the T106 comes a year later.
Frequently asked questions
Who has to file a T106?
A reporting person or partnership whose reportable transactions with non-arm's length non-residents total more than CAN$1,000,000 in the year.
When is the T106 due?
Corporations file six months after the end of the tax year. Individuals file by April 30 after the calendar year, or June 15 if they or their spouse are self-employed. Partnerships follow the partnership information return due date.
What is the T106 late filing penalty?
The greater of CAN$100 and CAN$25 a day, up to a maximum of 100 days, and it can be charged for more than one slip.
Do I report every non-resident in Part III?
No. If the transactions with one particular non-resident are below CAN$100,000 in the year, you don't need to report them in Part III of that slip.
Can I file the T106 electronically?
Corporations can EFILE for 2015 and later tax years and partnerships can EFILE or NETFILE for 2017 and later fiscal periods. Individuals and trusts paper-file.
