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For purposes of completing form t1134, a dormant or inactive foreign affiliate means, for a taxation year of the affiliate, one that You should answer yes to this new question when all foreign affiliates of the reporting entity (ies) are dormant, according to the instructions on form t1134. For these purposes, a “dormant” or “inactive” foreign affiliate is one that had gross receipts (including proceeds from the disposition of property) of less than $25,000 in the year and at no time in the year had assets with a total fair market value of more than $1,000,000. Dormant foreign affiliates are a special classification of corporations for the purposes of the t1134 to which special t1134 reporting exemptions apply
These exemptions and the definition of “dormant foreign affiliates” changed in 2021. For tax years that begin after 2020, a foreign affiliate is considered to be inactive or dormant when it has gross receipts of less than $100,000 and assets with a fair market value of less than $1,000,000. Previously, in the case of dormant or inactive foreign affiliates, the reporting was not required There is a reporting requirement for dormant or inactive fas in the t1134 summary part
If a t1134 supplement is not completed for a dormant/inactive foreign affiliate, the revised form still requires information such as the total cost amount, gross receipts, gross revenue and the nature of assets held by the foreign affiliates to be reported. Refer to the attached instructions for the definition of dormant or inactive foreign affiliates References on this return to the foreign affiliate or the affiliate refer to the foreign affiliate for which the reporting entity is filing a supplement. If t1134 supplements are not filed for dormant foreign affiliates, information such as gross receipts and gross revenue, and nature of assets held by the foreign affiliates (e.g., funds, shares, real property etc.) will have to be reported to prove that these entities are indeed “dormant”.
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