Non-Resident Withholding Tax

The non-resident withholding tax on payments for services requires the deduction of a tax, at a rate of 15%, from payments made to non-residents of Canada for services provided within Canada. This withholding tax requirement is outlined in Regulation 105 of the Income Tax Act. When services are performed both in and outside Canada, only the portion performed in Canada is subject to withholding tax.

It is important to allocate payment amounts appropriately between services rendered in Canada and elsewhere, either within a contract or through supporting documentation. Failure to make and document this allocation may result in a default 15% withholding on the total payment amount.

Who receives a T4A-NR?

As required by the Canada Revenue Agency (CRA), Selkirk College is responsible for reporting payments to non-residents on a T4A-NR and withholding any applicable tax. T4A-NRs must be issued for payments to all non-residents for services performed in Canada, including individuals, corporations, partnerships, trusts and all other types of organizations, even if they are tax-exempt.

Are travel expenses included?

In instances where travel expenses are reimbursed, they should be included on T4A-NRs solely for statistical purposes as per CRA guidelines regarding meal and accommodation costs. Non-Resident Tax will not be calculated and/or deducted on these amounts. Tax will only be deducted on the fees charges for services performed within Canada.

When will forms be mailed out?

Forms will be mailed out by February 28 of the following year.