Obtaining Canadian Tax Exemptions for Employees Temporarily in Canada
Feb. 18, 2016
The Canada Revenue Agency (CRA) recently provided guidance on new changes to the withholding tax requirements for non-Canadian resident employers. The changes offer non-Canadian employers a simplified approach to obtain an exemption from Canadian taxes for their non-Canadian resident employees working in Canada for limited time periods.
Non-Canadian resident employers can obtain the exemption for employees who are residents in a treaty country (such as the United States), are not subject to Canadian tax under a treaty exemption, and either:
- Worked in Canada for fewer than 45 days in the calendar year that includes the payment
- Were present in Canada for fewer than 90 days in any 12-month period that includes the payment date
To obtain the exemption, Form RC473, “Application for Non-Resident Employer Certification,” should be filed with the CRA at least 30 days before the qualifying nonresident employee starts providing services in Canada. Additionally, relief is available retroactively to Jan. 1, 2016, if the non-Canadian employer files Form RC473 by March 1, 2016.
Crowe Soberman has made a detailed analysis of the guidance, which is available on the Crowe Horwath International site.
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