Non-Resident Tax Services in Canada

Canadian tax for non-residents — a different regime

Non-residents of Canada are taxed on Canadian-source income only, generally through withholding at source rather than self-assessment. The standard non-resident withholding rate is 25%, although the Canada Revenue Agency administers numerous treaty reductions for residents of treaty countries. Several elections (Section 216 for rental income, Section 217 for certain pension and benefit income) allow non-residents to file an optional return to recover overwithheld tax or pay tax based on actual net income rather than gross.

Who we serve

• Non-residents earning Canadian rental income from residential or commercial property — Section 216 election filings
• Former Canadians receiving Canadian pensions abroad — Section 217 election filings
• Foreign owners of Canadian real estate selling property and dealing with Section 116 clearance certificates
• Non-resident actors, athletes, and entertainers performing in Canada subject to Regulation 105 withholding
• Canadians departing Canada permanently with deemed-disposition departure tax exposure
• Non-resident corporations carrying on business in Canada through a permanent establishment
• Estates of deceased non-residents with Canadian assets

What we deliver

• Section 216 rental election returns, including the upfront NR6 undertaking to reduce 25% gross withholding to 25% of net income
• NR4 information slip preparation and remittance to CRA on behalf of Canadian payers
• Section 217 election returns for certain Canadian pension, RRSP, RRIF, and OAS income received by non-residents
• Section 116 clearance certificates for non-residents selling taxable Canadian property
• Departure tax calculations under section 128.1 for emigrating Canadians, including the analysis of deemed dispositions and the optional posting of security to defer payment
• T1 returns for the year of departure (split-year residency)
• Treaty-based reduced withholding applications
• CRA waiver applications under Regulation 102 (employees) and Regulation 105 (services rendered in Canada by non-residents)

Section 216 — the most common non-resident filing

A non-resident who earns Canadian rental income is subject to 25% Canadian withholding on the gross rent. If the non-resident files a Section 216 election return, the tax is calculated on net rental income (gross rent minus deductible expenses including mortgage interest, property tax, maintenance, property management, insurance, and CCA at the owner's election). For most rental property situations, the Section 216 calculation produces tax that is significantly lower than 25% of gross rent, generating a refund of the difference. Filing Section 216 also creates carry-forward rental losses that can offset future Canadian rental income. The election return for Section 216 must be filed within two years of the end of the tax year.

Section 116 — selling Canadian real estate as a non-resident

A non-resident disposing of taxable Canadian property (most importantly, real estate) is required to obtain a Section 116 clearance certificate from CRA before closing. Without the clearance certificate, the buyer is required to withhold 25% of the gross sale price (50% for non-residential property in certain cases). The Section 116 process involves filing Form T2062 with CRA, paying tax on the estimated capital gain, and receiving a clearance certificate that the buyer can rely on to release the proceeds. We coordinate Section 116 filings, often within tight closing timelines.

Frequently asked questions

What Canadian businesses commonly miss about this service

Across the hundreds of Canadian businesses we work with, the same handful of issues come up repeatedly. Many small business owners delay engaging professional accounting until a crisis: a CRA review letter, an unfiled GST/HST return demand, a denied bank loan because financial statements aren't ready, or a Notice of Reassessment that arrived weeks ago. By the time we are first contacted, the cost to fix the problem is often several times what proper ongoing accounting would have cost from the start. Proactive engagement is dramatically cheaper than reactive cleanup.

The Canadian tax landscape also changes constantly. Recent changes that affect most Canadian taxpayers include the 2023 anti-flipping rule (residential real estate sold within 365 days is automatically business income, not capital gain); the Underused Housing Tax (UHT-2900 annual filing requirement for many corporations, partnerships, and trusts holding residential property even when no tax is owing — with $5,000 to $10,000 per-property failure-to-file penalties); the Quebec QST joint registration changes since 2021; the post-2018 Tax on Split Income (TOSI) rules that effectively eliminated casual income splitting through family dividends; the post-2021 $200,000 stock option vesting limit on the 50% deduction for options granted by non-CCPCs; the CSRS 4200 Compilation Engagement standard replacing the older Notice to Reader engagement; and ongoing CRA increased scrutiny on pre-construction assignments, short-term rental businesses, and cash businesses.

How BOMCAS Canada delivers this service

Every engagement begins with a written, fixed-fee engagement letter signed before any work is performed. The engagement letter describes exactly what is in scope, what deliverables you will receive, when those deliverables are due, what your monthly or project fee is, and what (if anything) is outside scope. This eliminates the hourly-billing surprise that most accounting clients fear. The only time we use hourly billing is for genuinely unpredictable items such as CRA audit response or complex one-off projects — and even then we agree to a maximum cap before starting.

Once the engagement letter is signed, you e-sign the CRA authorization (RC59 for businesses or AUT-01 for individuals), and we onboard you to the encrypted client portal with multi-factor authentication. All document exchange flows through the portal — no emailing of sensitive financial documents. Meetings happen by video conference or phone at times that work for you, including outside normal business hours when needed.

Our Canadian tax compliance philosophy

BOMCAS Canada is structured around four operating principles:

1. Tell the truth. If a tax position is aggressive, we say so. If a deduction will not survive a CRA review, we say so. If the engagement is going to cost more than originally quoted because the scope changed, we say so before doing the work.
2. Bill what we said we would bill. No surprise invoices. No scope-creep billing. If something legitimately changes scope, we discuss it and re-quote before doing the additional work.
3. Answer the phone. One-business-day response standard on client communications during normal business hours. No voicemail backlogs.
4. Specialize. Canadian tax and accounting is too complex to be a generalist. We do not do US-only tax, UK tax, or any other foreign jurisdiction in isolation. We are Canadian. Our cross-border work is always anchored by deep Canadian compliance.

What ongoing engagement with BOMCAS Canada looks like

For most clients, the ongoing relationship is structured around predictable monthly deliverables. For an incorporated small business client, that typically includes: monthly cloud bookkeeping with full bank and credit card reconciliation; quarterly or annual GST/HST returns prepared and filed; monthly payroll for owner-managers and any employees, with CRA source deduction remittances; year-end Compilation Engagement (CSRS 4200) financial statements; T2 corporate income tax return; owner-manager T1 personal tax return (and spouse where applicable); annual salary-vs-dividend optimization with written recommendation; unlimited email and phone support during business hours; one quarterly check-in call to review numbers and discuss the business; and CRA correspondence handling for routine review letters.

For a personal tax client, the ongoing engagement includes: annual T1 preparation; any required Quebec TP-1 (for Quebec residents); CRA pre-assessment and post-assessment review response when CRA requests additional documentation; Notice of Assessment reconciliation; and proactive tax planning conversations during the year about RRSP, TFSA, and FHSA contributions, major life events (marriage, kids, retirement, real estate), and any planned business or investment changes.

Frequently asked questions about engaging BOMCAS Canada

Why Canadian businesses choose specialized accounting over generalist accounting

The Canadian tax and accounting landscape has become significantly more complex over the past decade. The 2018 TOSI rules, the 2021 changes to stock option taxation, the 2022 mandatory reporting changes for trusts, the 2023 anti-flipping rule, the Underused Housing Tax, the changes to the small business deduction phase-out for passive investment income, the new CSRS 4200 Compilation Engagement standard, the continued expansion of digital sales tax rules, and the ongoing post-COVID CRA focus on cash businesses and unreported income have all required accountants to specialize more deeply. A generalist firm trying to cover personal tax, corporate tax, US tax, real estate, trusts, cross-border, and every industry vertical inevitably falls behind on the depth of expertise that any one client needs.

BOMCAS Canada is structured deliberately to maintain depth: we are Canadian-only by design; we work in industries where we have genuine specialized experience; we maintain ongoing professional education in Canadian tax law; we use Canadian-experienced staff at every level; and we coordinate with specialized partners (US-licensed cross-border, legal counsel for corporate restructuring, audit-engagement licensed practitioners) where required rather than trying to handle everything in-house.

Talk to a Canadian accountant

Call 780-667-5250 or submit the contact form. We respond within one business day and provide a fixed written quote before any work begins.

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