3/25/2016 12:00:00 AM | less than a minute read

Canada: changes to the non-resident withholding relief process

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Chris Pardo

Vice President of Consulting

Get in touch

Chris Pardo

Vice President of Consulting

Q: What do you call a sophisticated American?

A: Canadian.

Q: What Dr Seuss book do they read every morning in Canada?

A: Tim Hortons Hears a Who.

These are indeed jokes, albeit maybe not that funny (but at least not too offensive).

Canadian tax law, on the other hand, is no joke. Recently the CRA provided information on the tasks a company must complete to get an exemption from withholding requirements on remuneration paid to "qualifying" non-resident employees for services performed in Canada. If the employer and the employee qualify, this will save the company time and CAD!

Qualifying Non-Resident Employer Resident of a country with which Canada has a tax treaty. If employer is a partnership, at least 90% of its income or loss for the fiscal period should be allocable to partners who are resident in a country with which Canada has a treaty. Employer should be certified by the Minister of National Revenue. The application for certification is made on Form RC473, as described below. Qualifying Non-Resident Employee Resident of a treaty country; Is expected to be exempt from Canadian income tax under the treaty provisions; and Is not present in Canada for 90 or more days in any 12-month period or works in Canada for less than 45 days in the calendar year.

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