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This Guide is meant for Non-Residents of Canada that own rental properties in Canada.
The non-resident must withhold and remit non-resident tax at a rate of 25% of either the gross rental income amount (if no NR6 is prepared) or the net rental income amount (if an NR6 is approved by CRA).
The payer of the non-resident tax, which may be the tenant or property manager, must make the payment to CRA on or before the 15th day of the month following the month the rental income was paid.
The non-resident must set up a non-resident account number by calling CRA.
CRA may apply a penalty for a non-resident who fails to remit tax when:
| Days Late | Penalty |
|---|---|
| 1-3 | 3% |
| 4-5 | 5% |
| 6-7 | 7% |
| +7 or never remitted | 10% |
An NR4 slip must be attached to the back of your section 216 return.
The NR4 slip shows the gross rental income and non-resident tax withheld and remitted for the taxation year.
Note: If you are a co-owner (i.e. you and your spouse each own 50% of the rental property), an NR4 slip must be prepared for each co-owner and should reflect each co-owners share of the gross income and non-resident tax withheld.
The NR4 slip and summary must be submitted to CRA by March 31st.
If the NR4 slip and summary is filed late or never filed, CRA may assess a penalty of $100.
If you have an agent (i.e. a property manager) they typically prepare the NR4 slip.
However, if your agent did not prepare the NR4 slip, Calgary Tax Consulting can prepare it.
If a non-resident does not have an agent, then an NR4 Pro Forma must be prepared.
An NR4 Pro Forma is a letter sent to CRA requesting that CRA prepare the non-resident’s, NR4 slip.
The non-resident can prepare the NR4 Pro Forma or Calgary Tax Consulting can prepare it.
Information required for the NR4 Pro Forma:
The NR4 Pro Forma must be submitted to CRA by March 31st.
When filing the section 216 return, if we have not yet received the NR4 slip by CRA, we attach the NR4 Pro Forma to the section 216 return and request CRA to attach the slip to the return.
An NR6 allows the non-resident to withhold and remit non-resident tax at 25% of the net rental income amount instead of the gross rental income amount.
In order to file an NR6, the non-resident must appoint an individual to be their agent. The agent can be a property manager or another person such as a family member.
To prepare the NR6 form, the non-resident must provide an estimation of the expected gross rental income and expenses for the next tax year.
When submitting the NR6 form, a breakdown of the expected expenses must be attached.
The NR6 should be filed on or before January 1st of each year.
If an NR6 was approved the section 216 return is due on or before June 30th
If no NR6 was prepared or approved the section 216 return is due 2 years from the end of the year the rental income was paid to you.
If you disposed of the rental property and are including a recapture of the CCA you must file the section 216 return by April 30th.
The non-resident must notify CRA of the disposition of the rental property within 10 days from the date the property was disposed.
The non-resident must fill form T2062 http://www.cra-arc.gc.ca/E/pbg/tf/t2062/t2062-16e.pdf .
If you claimed CCA in prior section 216 returns and you disposed of the property, the section 216 return for the current period must include a recapture of the CCA.
If a terminal loss occurred as a result of the disposition, the loss must also be reported on line 126.
If a Calgary Tax Consulting is preparing the NR4 Slip, NR4 Pro Forma, NR6 or if you need a Calgary Tax Consulting to contact the CRA Non-Resident Withholding Department on your behalf. You must first authorize us by mailing an ORIGINAL signed NR 95 Form to following address as per CRA policy:
Non-Resident Withholding Section Sudbury Tax Centre
Sudbury ON P3A 5C1 Canada
Our Accountant will provide you instruction on how to fill out the NR95 Form.
Failure to fill form T2062 within 10 days after the date of disposition will result in a penalty of $25 a day.
If you have a balance owing you should pay it on or before April 30th.
Interest is charged for balance owing starting May 1st.
The non-resident must complete 2 documents:
If the non-resident would like to have an NR6 prepared they must fill an additional document:
| Form | Fee (Individual) | Fee (Joint) |
|---|---|---|
| Section 216 | $350 | $450 |
| NR4 Slip/NR4 Pro Forma | $100 | $150 |
| NR6 | $150 | $200 |
Let Calgary Tax Consulting experts file your belated return & claim your tax.
