AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A Canadian corporation that owns a Nigerian company which is its foreign affiliate must file Form T1134, with a separate supplement for that affiliate, within 10 months after its tax year end for tax years beginning after 2020. A supplement is not needed if the total cost of the affiliate was under CAD 100,000 throughout the year and the affiliate was dormant, meaning gross receipts under CAD 100,000 and assets of no more than CAD 1,000,000.
What T1134 is for
T1134 is an information return. It tells the CRA about non-resident corporations and trusts in which a Canadian taxpayer has a significant interest, so that the CRA can apply the foreign affiliate and foreign accrual property income rules. It does not itself create tax; it reports facts the CRA uses to check your T2.
The CRA's page on foreign affiliate returns (modified 19 October 2026) says a taxpayer or partnership with a foreign affiliate must file, and that a separate supplement is needed for each affiliate that is a controlled or non-controlled foreign affiliate at any time in the year. A foreign affiliate is a non-resident corporation or non-resident trust meeting the ownership tests in section 95 of the Income Tax Act. A Nigerian company that your Canadian company owns outright is a controlled foreign affiliate.
Deadlines
| Tax year | T1134 due (CRA) |
|---|---|
| Beginning before 2020 (2012/2017 version) | Within 15 months of year end |
| Beginning in 2020 | Within 12 months of year end |
| Beginning after 2020 (2021 version) | Within 10 months of year end |
Example: a Canadian corporation with a 31 December 2026 year end must file T1134 for that year by 31 October 2027. The CRA's T2 guide (T4012) also lists T1134 among returns due within 10 months.
The dormant exemption
A new Nigerian subsidiary that has not started trading may not need a supplement. The CRA says no supplement is required if both:
- the total cost amount of the affiliate to you was under CAD 100,000 at all times in the year, and
- the affiliate was dormant or inactive for its year ending in your tax year, which for tax years after 2020 means gross receipts under CAD 100,000 and assets with a total fair market value of no more than CAD 1,000,000.
For years after 2020 the test is applied entity by entity. If you have two Nigerian companies, each must meet it. Once the subsidiary starts trading in earnest, or your investment reaches CAD 100,000, a supplement is due.
Worked example
Example only. Your Toronto company sets up a Lagos subsidiary in March 2026 with share capital and loans worth CAD 40,000, and the subsidiary invoices ₦30,000,000 in its first year, about CAD 25,000 at an invented rate of ₦1,200. Cost is under CAD 100,000, receipts are under CAD 100,000 and assets are far below CAD 1,000,000: no supplement for 2026. In 2027 you lend a further CAD 80,000, taking cost above CAD 100,000: a supplement is due for 2027.
Who files in a group
Only the lowest-tier Canadian corporation reports on a foreign affiliate. If Canco 1 owns Canco 2, which owns the Nigerian company, Canco 2 files, even though the Nigerian company is also a foreign affiliate of Canco 1.
How to file
- Corporations and partnerships can EFILE through tax software and attach documents through the CRA's submit-documents service; EFILE gives an immediate confirmation number.
- Individuals can EFILE or NETFILE T1134 for 2021 and later years.
- Paper returns go to the address on the form; individuals and trusts file paper T1134 separately from their income tax return.
- Amend paper filings by resubmitting the whole return marked "AMENDED"; amend e-filed returns electronically.
Information to gather from Lagos
- The Nigerian company's CAC registration details and shareholding.
- Its financial statements for the year ending in your tax year, with revenue, assets and income by type.
- Taxes paid in Nigeria.
- Loans and other balances between the companies.
- Any further companies the Nigerian company owns.
Start early. Nigerian statements under IFRS are often finalised months after year end, and the 10-month clock is short.
How T1134 relates to your other returns
T1134 is one of several information returns a Canadian company with Nigerian links may owe. The CRA's T2 guide lists Form T106 where reportable transactions with non-residents exceed CAD 1,000,000, and Form T1135 where specified foreign property costs more than CAD 100,000. Check each form's instructions for what belongs where. Build all of them into the same year-end calendar.
Penalties
The CRA's foreign affiliate page does not state penalty amounts. The Income Tax Act does impose penalties for late or missing information returns, and they can be significant relative to the size of a small subsidiary. Check the current amounts with your accountant or the CRA before you decide that filing can wait. This is information, not tax advice.
Where Pryme fits
Funding a Nigerian subsidiary leaves a trail the T1134 needs: capital, loans and repayments. Moving that money through a Pryme Business Account, with Swap showing the rate and fee before each conversion, gives you dated records, and Pryme for multiple entities keeps parent and subsidiary separate. Related: setting up a Nigerian subsidiary and T106 for transactions with a Nigerian affiliate.
Questions people ask
When is T1134 due for a Nigerian subsidiary?
Within 10 months after your tax year end, for tax years beginning after 2020. A 31 December 2026 year end means 31 October 2027.
Do I file T1134 for a dormant Nigerian company?
No supplement is needed if its total cost to you was under CAD 100,000 throughout the year and it was dormant: gross receipts under CAD 100,000 and assets of no more than CAD 1,000,000.
Who files if a holding company owns the Canadian operating company?
Only the lowest-tier Canadian corporation reports on the foreign affiliate.
What are the T1134 penalties?
The CRA's foreign affiliate page does not list them. The Income Tax Act sets penalties for late or missing information returns; check current amounts with an adviser.
Sources
- CRA: Information returns relating to foreign affiliates (modified 19 Oct 2026) · accessed Oct 2026
- CRA T4012 T2 Corporation Income Tax Guide, chapter 2 (modified 28 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.