Because "equity percentage" in s. 95(4) includes indirect share ownership, the reporting requirements could lead to a considerable administrative burden where a taxpayer holds vertically structured foreign affiliates. CRA confirmed that, where a Canco holds an FA1, which holds an FA2, which holds an FA3 (all 100% ownership), FA3 should be reported in Section 3B of new Form T1134 twice, as both FA1 and FA2 hold 100% equity percentage in FA3.
In response to a further example where FA3 holds 200 additional FAs, CRA indicated that it is "considering developing administrative policy to provide relief in such situations."
CRA's change in the new Form T1134, which limits administrative relief for dormant or inactive foreign affiliates to situations where total investment in foreign affiliates is less than $100,000, is meant to eliminate a reporting gap between Forms T1134 and the "legislative thresholds for Form T1135."