Is the 5% penalty for failing to file Form T1135 levied per year ?

The 5% penalty is levied when the failure to file for a year is done knowingly or under circumstances amounting to gross negligence.

For example, if a person fails to file for the 2019 tax year and the failure continues for more than 24 months, the 5% penalty will be levied on the cost amount of foreign property owned in 2019. The 5% penalty is levied only once and is not per year.

If the same person continues to own the foreign property in 2020 and again fails to file the information return for a period of more than 24 months, the 5% penalty will be levied on the cost of the property that should have been reported for the 2020 tax year. The penalty for 2020 is separate from the one in 2019.

If the person owned no foreign property in 2020 for which Form T1135 was required to be filed, there would be no additional penalty.