As a follow up to our 2015
blog post, the Canadian Federal Budget introduced measures to
streamline the Canadian payroll tax withholding requirements for
The budget introduced an exemption to the Regulation 102
requirement for qualifying non-resident employers on payments made
to qualifying non-resident employees who meet the following
Is resident in a country that Canada
has a tax treaty with at the time of the payment;
Does not have to pay tax in Canada on
the payment because of a tax treaty; and
Works in Canada for less than 45 days
in the calendar year that includes the time of the payment or is
present in Canada less than 90 days in any 12-month period that
includes the time of the payment.
A qualifying non-resident employer must meet all of the
Resident in a country that Canada has
a tax treaty with; and
Certified by the Minister of National
Revenue under subsection 156(7) of the Income Tax Act.
To become certified, the qualifying non-resident employer must
file Form RC473, Application for Non-Resident Employer
Certification. The form should be filed at least 30 days before the
qualifying non-resident employee starts to work in Canada.
Certification is valid for 2 years.
For the 2016 tax year, the Canada Revenue Agency (CRA) has
indicated that Form RC473 applications must be received by the CRA
before the end of day March 1, 2016 for a retroactive certification
effective date of January 1, 2016.
The qualifying non-resident employer who files Form RC473 must
agree to the following CRA conditions:
Evaluate and document how the
employee meets the definition of a qualifying non-resident employee
at the time payment of any employment income;
Track and document on an ongoing
basis the number of days the qualifying non-resident employee is
working in Canada or is present in Canada and the employment income
that corresponds to these days;
Obtain a Canadian Business
File the T4 slip and T4 Summary for
the non-resident employee who has provided employment services in
Canada and whose total income in Canada is greater than
File Canadian income tax returns for
those calendar years covered by the certification period; and
The books and records will be made
available to the CRA for inspection upon request.
This exemption does not cover Canada Pension Plan or Employment
Insurance contributions as these are covered under separate tax
How we can help:
Applying for and complying with the Non-Resident Employer
Certification can be complex and involves a number of requirements.
Fuller Landau's international tax group can help you navigate
all of the filing obligations and ensure you are complying with the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The CRA provides new housing rebates for individuals who have purchased or built a new house or have substantially renovated a house or made a major addition to a house who plan on living in it personally or letting a relative live there.
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