Still Holding a Taiwan Brokerage Account After Moving to Canada? Here Is What CRA Expects

What counts as specified foreign property for T1135 purposes

Under the Income Tax Act, specified foreign property includes assets held outside Canada with a total cost exceeding CAD $100,000 at any time during the year. For individuals with Taiwan brokerage accounts, the following assets are reportable specified foreign property: shares of Taiwan-incorporated companies held in a Taiwan brokerage account, Taiwan mutual funds or ETFs that are not Canadian-resident entities, cash and deposits held in Taiwan brokerage accounts, bonds or fixed income instruments issued by Taiwan companies or the Taiwan government, and Taiwan money market funds held in a brokerage account.

The threshold is based on cost amount — the original purchase price in Canadian dollars — not the current market value. If you purchased Taiwan equities at a time when the account cost was CAD $120,000, T1135 reporting is required for that year even if the current market value has since fallen to CAD $80,000. Conversely, if the market value rises above $100,000 but the original cost was below that threshold, T1135 is not required solely based on market appreciation.

The first-year exemption — and what happens after

There is one important exemption: in the tax year you first become a Canadian resident, you are generally not required to file T1135 for that year. This is an administrative position taken by CRA, not a statutory exemption, but it is well-established and consistently applied. It exists because the cost base for assets held before Canadian residency is established at fair market value on the date of entry — and that value is not always immediately known. The exemption applies to the year of arrival only. Starting from your second year of Canadian residency, T1135 reporting obligations apply in full if your specified foreign property exceeds the $100,000 threshold. Many Taiwan immigrants are unaware that the exemption is limited to the first year, and incorrectly assume it continues. The result is missing T1135 filings for the second, third, and subsequent years — each of which carries its own penalty exposure.

Determining the cost amount for your Taiwan brokerage account

The cost amount for T1135 purposes is the adjusted cost base (ACB) of the foreign property in Canadian dollars. For assets held before you became a Canadian resident, CRA treats those assets as having been acquired at fair market value on the date you became a Canadian resident. This means your T1135 cost base is the fair market value of your Taiwan brokerage account on the date your Canadian residency began — not the original historical purchase price. In practical terms: if you became a Canadian resident on June 1, 2022, and your Taiwan brokerage account had a market value of TWD $4,500,000 on that date, you convert that amount to Canadian dollars using the Bank of Canada exchange rate for June 1, 2022, and that figure becomes your cost amount for T1135 purposes going forward. Documenting this value at the time of entry is critical. CRA does not accept retroactive reconstructions without contemporaneous evidence. If you did not record the value of your Taiwan brokerage account on your date of entry, reconstructing it accurately — even with brokerage statements — can be complex and may be challenged on audit.

Income generated by the Taiwan brokerage account

T1135 is a reporting form only — it does not determine how income is taxed. But the income generated by your Taiwan brokerage account is separately taxable in Canada as part of your worldwide income. This includes: dividends from Taiwan equities, interest from Taiwan bonds, fixed income instruments, or cash deposits, capital gains on disposal of Taiwan securities, and distributions from Taiwan mutual funds. Each type of income is reported on your Canadian T1 return in the year it is received or realized. If Taiwan withheld tax on dividends or interest at source, you may claim a foreign tax credit on your Canadian return to reduce double taxation. The foreign tax credit does not eliminate the Canadian reporting obligation — it offsets it. You must report the gross income and claim the credit separately.

What happens if you have missed T1135 filings for prior years

If you have been a Canadian resident for two or more years and have not filed T1135 for your Taiwan brokerage account, you have late or missing foreign reporting returns. The automatic penalty for each missed T1135 is $25 per day from the filing deadline, up to $2,500 per missed return. If you have missed three years of filings, the penalty exposure is up to $7,500 before interest. Gross negligence penalties can reach 5% of the cost of the unreported property — which on a $200,000 account is $10,000 per year. If CRA has not yet contacted you about the specific non-compliance, the Voluntary Disclosures Program (VDP) may be available. VDP allows you to file the missing T1135 returns, pay any taxes owing, and receive 100% relief from penalties plus 75% reduction in interest on unprompted disclosures. The window to use VDP closes the moment CRA initiates contact about the specific issue.

Frequently asked questions

I moved from Taiwan to Canada in 2022. I have a Taiwan brokerage account with a cost of approximately CAD $150,000. Have I been required to file T1135?

The first year of Canadian residency (2022) is generally exempt from T1135 filing. For 2023, 2024, and 2025, T1135 filing was required annually if the cost of your specified foreign property exceeded $100,000 at any point during those years. If you have not filed for those years, you have missed filings for up to three years. If CRA has not contacted you about this, the VDP may allow you to file late and reduce penalties significantly.

My Taiwan brokerage account holds Taiwan ETFs that track international indices. Do these count as specified foreign property?

Taiwan-domiciled ETFs are foreign property for T1135 purposes if the fund itself is not a Canadian-resident entity. Most Taiwan-listed ETFs are Taiwan-domiciled and would therefore be reportable specified foreign property. The relevant question is where the fund is domiciled — not what index it tracks or where the underlying holdings are located.

I transferred most of my Taiwan account to a Canadian brokerage. Do I still need to file T1135?

Once assets are transferred to and held in a Canadian brokerage account, they are generally no longer specified foreign property for T1135 purposes — provided the Canadian brokerage is a Canadian-resident entity. However, for the year in which the transfer occurred, the Taiwan account may have been above the $100,000 threshold at some point during the year (before the transfer), which would trigger a T1135 obligation for that year. Review the cost amount at the start of the year and during the transfer period to confirm whether a T1135 was required.

My Taiwan brokerage account had a cost of CAD $80,000 when I became a Canadian resident. It has since grown to CAD $130,000 in market value. Do I need to file T1135?

No. The T1135 threshold is based on cost amount — the original acquisition cost in Canadian dollars — not the current market value. If the cost of your specified foreign property has not exceeded $100,000 at any point during the year, T1135 is not required. However, when you sell securities and reinvest, the cost of the new securities is added to your cost base. If cumulative purchases push the cost above $100,000, T1135 becomes required for that year.