T4061 NR4 – Non-Resident Tax Withholding, Remitting, and Reporting 2018

Before you start

What are your responsibilities?

As the Canadian payer or withholding agent, you are responsible for withholding and remitting Part XIII tax, and for reporting the income and withholding tax on an NR4 information return. The NR4 information return includes NR4 slips and the related NR4 Summary.

You have to file the NR4 information return and give the recipients their NR4 slips on or before the last day of March following the calendar year to which the information return applies, or in the case of an estate or trust, no later than 90 days after the end of the estate’s or trust’s tax year.

Penalties, interest and other consequences

Mandatory electronic filing

Failure to file information returns over the Internet

If you file more than 50 information returns (slips) for a calendar year and you do not file the returns by Internet file transfer or Web Forms, you may have to pay a penalty decided as follows:

Each slip is an information return, and the penalty the Canada Revenue Agency (CRA) assesses is based on the number of information returns filed in an incorrect way. The penalty is calculated per type of information return. For example, if you file 51 NR4 slips and 51 T4 slips on paper, the CRA would assess two penalties of $250, one for each type of information return.

Failure to deduct

If you failed to deduct the required amount of the Part XIII tax from the amount you pay or credit to a non-resident, you are liable for this amount even if you cannot recover the amounts. We will assess you for any amount owing. We will also assess a penalty and interest as described in the section “Penalty for failure to deduct” below.

Penalty for failure to deduct

The CRA can assess you for the amount of tax that you failed to deduct. The CRA can also assess a penalty of 10% of the required amount of Part XIII tax you failed to deduct.

If you are assessed this penalty more than once in a calendar year, the CRA will apply a 20% penalty to the second or later failures if they were made knowingly or under circumstances of gross negligence.

Failure to remit amounts deducted

When you deduct the amounts of the Part XIII tax, you have to remit them to the Receiver General for Canada.

The CRA will also assess a penalty and interest as described in the section “Penalty for failure to remit and remitting late” below.

Penalty for failure to remit and remitting late

The CRA can assess a penalty on the amount you failed to remit when one of the following applies:

• you deduct the amounts, but do not remit them
• the CRA receives the amounts you deducted after the due date

When the due date falls on a Saturday, a Sunday, or a public holiday recognized by the CRA, your remittance is considered on time if the CRA receives it on the next business day.

The penalty for remitting late is:

• 3% if the amount is one to three days late
• 5% if the amount is four or five days late
• 7% if the amount is six or seven days late
• 10% if the amount is more than seven days late or if no amount is remitted

If you are assessed this penalty more than once in a calendar year, the CRA may assess a 20% penalty to the second or later failures if they were made knowingly or under circumstances of gross negligence.

Late-filing and failing to file the NR4 information return

You have to give the recipient his or her NR4 slip and file your NR4 information return with the CRA on or before the last day of March after the calendar year to which the information return applies, or no later than 90 days after the end of the estate’s or trust’s tax year. If the last day of March falls on a Saturday, a Sunday, or a public holiday recognized by the CRA, your information return is due the next business day.

The CRA considers your return to be filed on time if the CRA receives it or it is postmarked on or before the due date.

The CRA may assess a penalty if you file your information return late. For NR4 information returns, the CRA has an administrative policy that reduces the penalty that it assesses so it is fair and reasonable for small businesses. Each slip is an information return, and the penalty the CRA assesses is based on the number of information returns you filed late. The penalty is $100 or the amount calculated according to the chart below, whichever is more:

Failure to provide information on an information return

Anyone who prepares an NR4 information return has to make a reasonable effort to get the necessary information, including identification numbers, from the recipients that will receive the slips. If you do not do this, you may be liable to a $100 penalty for each failure to comply with this requirement.

Failure to file an ownership certificate

The CRA also applies a $50 penalty for each failure to fill out or deliver an ownership certificate (Form NR601, Non-Resident Ownership Certificate – Withholding Tax, and Form NR602, Non-Resident Ownership Certificate – No Withholding Tax), for the negotiating of bearer coupons or warrants.

Interest

If you fail to pay an amount, the CRA may apply interest from the day your payment was due. The interest rate the CRA uses is determined every three months, based on prescribed interest rates. Interest is compounded daily. The CRA also applies interest to unpaid penalties. For the prescribed interest rates the CRA uses, go to Prescribed interest rates.

Cancel or waive penalties or interest

The CRA administers legislation, commonly called the taxpayer relief provisions, that gives the CRA discretion to cancel or waive penalties or interest when taxpayers are unable to meet their tax obligations due to circumstances beyond their control.

The CRA’s discretion to grant relief is limited to any period that ended within 10 calendar years before the year in which a request is made.

For penalties, the CRA will consider your request only if it relates to a tax year or fiscal period ending in any of the 10 calendar years before the year in which you make your request. For example, your request made in 2019 must relate to a penalty for a tax year or fiscal period ending in 2009 or later.
For interest on a balance owing for any tax year or fiscal period, the CRA will consider only the amounts that accrued during the 10 calendar years before the year in which you make your request. For example, your request made in 2019 must relate to interest that accrued in 2009 or later.

To make a request, fill out Form RC4288 Request for Taxpayer Relief – Cancel or Waive Penalties or Interest. For more information about relief from penalties or interest and how to submit your request, go to Taxpayer relief provisions.

Representatives for non-resident tax accounts

To authorize a representative for your non‑resident tax account, to make changes to the representative information, or to cancel your representative’s authorization, you must fill in and send to the CRA the new Form NR95, Authorizing or Cancelling a Representative for a Non-Resident Tax Account.

Also, to continue any existing authorization(s) for your non-resident tax account, you will need to send the CRA a completed Form NR95.

Where to send requests

Send requests to the following address:

Non-Resident Withholding Section
Sudbury Tax Centre
Post Office Box 20000, Station A
Sudbury ON  P3A 5C1
CANADA

Fax requests to: 705-677-7712 or 1-866-765-8460

Enquiries

To make an enquiry about your authorization, call the CRA:

• From Canada and the United States: 1-855-284-5946
• From other parts of the world: 613-940-8499

For detailed information on the new Form NR95 and the new process for authorizing or cancelling a representative for a non-resident tax account, go to Representatives for non-resident tax accounts.

What is Part XIII tax?

Part XIII tax is a withholding tax imposed on certain amounts you pay or credit to non-residents. These amounts include:

• pensions, annuities, management fees, interest, dividends, rents, royalties, estate or trust income, and payments for film or video acting services when you pay or credit these amounts to individuals (including trusts) or corporations that are not resident in Canada.

You are responsible for withholding Part XIII tax if you are:

• a Canadian resident who pays or credits Part XIII amounts to a non-resident, or is considered to have done so under Part I or Part XIII of the Income Tax Act
• an agent (such as a bank, trust company, or credit union) or person who, for a debtor, pays or credits Part XIIIamounts when redeeming bearer coupons or warrants
• an agent or another person who receives Part XIII amounts for a non-resident, from which tax was not withheld
• any other person (including a non-resident) who pays or credits amounts that are taxable under Part XIII, or who is considered to have done so under Part I or Part XIII of the Income Tax Act

For information about specific types of income that are taxable under Part XIII tax, see the current version of Information Circular IC77-16R4 Non-Resident Income Tax.

Rates of Part XIII tax

Non-residents have to pay a 25% tax on amounts that are taxable under Part XIII. However, this rate can be reduced to a lower rate or an exemption can be given under the provisions of the Income Tax Act or a bilateral tax treaty between Canada and another country.

As the Canadian payer or withholding agent, you are responsible for withholding and remitting Part XIII tax at the correct rate.

If you pay or credit or are considered to have paid or credited a taxable amount to persons in countries that have tax treaties with Canada, you should verify the rate given in the Income Tax Act first. Then verify if a reduced rate or an exemption applies under the treaty.

The negotiation of new tax treaties and renegotiation of existing tax treaties is an ongoing process. For this reason, you should verify tax treaty rates and exemptions on a regular basis.

You can use the online Part XIII Tax Calculator to determine your Part XIII tax liability. The CRA developed this convenient and interactive tool to help you determine your tax liability in an accurate and timely manner. For more information, go to Non-Resident Tax Calculator.

You can also get the current tax rates and effective dates by contacting the CRA at the numbers listed at the end of this guide or visit the Finance Canada website at Status of Tax Treaty Negotiations.

The 25% Part XIII tax will apply to any taxable amounts you paid or credited to persons in non-treaty countries.

The 25% Part XIII tax also applies to payees in countries with which Canada has a tax treaty that is not yet in effect.

A Part XIII tax rate of 23% applies to the gross amounts paid, credited, or included as a benefit for acting services rendered in Canada by a non-resident actor, including payments of residuals and contingent compensation. This rate applies only to the acting services of the actor in a film or video production. For more information, go to Film and Media Tax Credits and select Non-resident actors.

For more information about tax treaties, see the current version of Information Circular IC76-12, Applicable rate of Part XIII tax on amounts paid or credited to persons in countries with which Canada has a tax convention. The information in that circular also applies if you are considered, under Part I or Part XIII of the Income Tax Act, to have paid or credited to residents of these treaty countries amounts that are taxable under Part XIII.

Beneficial ownership and tax treaty benefits

The payee’s name and address may no longer be the only information needed to establish that treaty benefits apply.

To apply the correct rate of withholding, you should have enough recent information to prove that the payee:

• is the beneficial owner of the income
• is resident in a country with which Canada has a tax treaty
• is eligible for treaty benefits under the tax treaty on the income being paid

If you are not sure whether all three criteria are true, ask the payee to fill out and give you either the applicable form below or equivalent information:

• Form NR301, Declaration of eligibility for benefits (reduced tax) under a tax treaty for a non-resident person
• Form NR302, Declaration of eligibility for benefits (reduced tax) under a tax treaty for a partnership with non-resident partners
• Form NR303, Declaration of eligibility for benefits (reduced tax) under a tax treaty for a hybrid entity

Beneficial ownership

Generally, you can accept that the payee is the beneficial owner of the income, unless there is reasonable cause to suspect that the payee is not the beneficial owner.

Although this list does not cover all possibilities, it is reasonable to question whether the payee is the beneficial owner in the following situations:

• the payee is known to act, even occasionally, as an agent or nominee (other than as an agent or nominee residing in Switzerland)
• the payee is reported to be “in care of” another person, or “in trust”
• the mailing address for paying the income is different from the owner’s registered address
• the payee is a partnership, a US Limited Liability Corporation, any other flow-through entity, or a co-ownership arrangement

If the payee is an insurance corporation or pension trust, the CRA will accept that the payee is the beneficial owner of amounts paid to a non-resident. However, that corporation or trust has to invest only for itself and include the amounts when it calculates its revenue.

Residence and eligibility for treaty benefits

The payee, partnerships or other flow-through entities with non-resident partners or members can give you one of the forms NR301, NR302, or NR303, or the information requested in these forms to certify that they are:

• the beneficial owner of the income
• resident in a specific tax treaty country
• eligible for tax treaty benefits on the income they receive

Even if you do not get Form NR301 or the information requested in the form to support the beneficial owner’s country of residence and eligibility for tax treaty benefits, you may apply a tax treaty rate if all of the following are true:

• You obtain complete addresses of residence (permanent addresses) that are not post office boxes or care-of addresses
• You know that one of the following applies:
  • the payee is an individual
  • the payee is an estate of a United States resident and the executor manages and controls the estate from the United States
• You have no reason to suspect the information is inaccurate, misleading, or that the payee is not entitled to the tax treaty benefit
• You have procedures in place so that changes in the payee’s information, (such as change of address or contact information that includes a change in country, or returned mail) will result in a review of the withholding tax rate
  Note
  Collect additional documentation or Form NR301 if the treaty benefit applies only under certain conditions (such as when the amounts must be received in, taxable in or taxed in the country of residence).

In addition, do not request forms NR301, NR302, or NR303 from the beneficial owner in the following circumstances:

• You will withhold the tax rate specified in Part XIII or Part XIII.2 of the Income Tax Act.
• You make a payment to an agent or nominee residing in Switzerland. You can withhold tax at the rate given in the Canada – Switzerland tax treaty on all amounts that you pay or credit that are taxable under Part XIII.
• The Income Tax Act gives a reduction or exemption (except where the CRA requests written authorization).
• The CRA issues a letter of exemption or written authorization. You can reduce the withholding tax only after you receive the letter or authorization from the CRA.
• You pay dividends to certain organizations of the United Kingdom: As long as certain conditions are met, dividends beneficially owned by an organization that was constituted and is operated in the United Kingdom only to administer or provide benefits under one or more recognized pension plans are exempt from withholding tax under Article 10 (Dividends) of the Canada-United Kingdom tax treaty. The treaty was amended by a protocol that came into effect for withholding tax for calendar years starting on or after January 1, 2015. Withholding agents should get a letter from the United Kingdom tax administration confirming that the recipient meets the criteria in Article 10.

The letter should be valid for the year in question and for no more than 3 years in total and:

• in the case of pension plans arranged through an insurance company, confirm that the insurance company administers or manages pension schemes registered under Part 4 of the Finance Act 2004 (United Kingdom) including the schemes listed by the insurance company to which the arrangement applies
• in all other cases, affirm that the pension plan is registered under Part 4 of the Finance Act 2004 (United Kingdom), including pension funds or pension schemes arranged through insurance companies and unit trusts where the unit holders are only pension schemes

The organization must attest that it is generally exempt from tax in the United Kingdom and does not directly or indirectly own more than 10% of the capital or more than 10% of the voting power of the company paying the dividends. In addition, the dividends received must only be for the benefits of recognized pension plans and the recognized pension plans must provide benefits to individuals, of which at least 90% must be residents of the United Kingdom.

You pay dividends to certain organizations of Switzerland: As long as certain conditions are met, dividends beneficially owned by an organization that was constituted and is operated in Switzerland only to administer or provide benefits under one or more recognized pension plans are exempt from withholding tax under Article 10 (Dividends) of the Canada‑Switzerland tax treaty. The treaty was amended by a protocol that came into effect for withholding tax for calendar years starting on or after January 1, 2012. Withholding agents should get a letter from the Switzerland tax administration confirming that the recipient meets the criteria in Article 10. The letter should say that the pension plan or plans match a pension or retirement plan in Switzerland that Canada recognizes for tax purposes and that is listed on the CRA’s website at Memorandum of Understanding Between the Competent Authorities of Canada and Switzerland.

The dividends cannot come from carrying on a trade or a business or from a related person.

The CRA issues a letter of exemption or written authorization to a non-resident for the following:

• Certain amounts paid to the government of another country that is exempt from Part XIII tax either due to a provision in a tax treaty or according to the Doctrine of Sovereign Immunity.
• Certain pensions and similar payments received from Canada if the total amount received from all payers is less than a certain threshold amount.
• Amounts received by organizations or plans exempt from tax under Article XXI of the Canada – United States tax treaty. If the non-resident only gives you an exemption number you must verify the expiry date by checking Guide T4016 Exempt U.S. Organizations – Under Article XXI of the Canada – United States Tax Convention.

Amounts payable to a non-resident agent or nominee/financial intermediary

Non-resident agents or nominees who are holding securities on behalf of other non-residents must fill out and send an agent or nominee certificate, as described in the current version of Information Circular IC76-12, Applicable rate of Part XIII tax on amounts paid or credited to persons in countries with which Canada has a tax convention to the payer or another upstream agent or nominee, when applicable.

It is understood that only the entity that directly pays the beneficial owner will have the address and identification information of the beneficial owner. The CRA expects that entity to maintain this information and not pass it up to a chain of intermediaries. The payer will only receive pooled information in the form of an agent or nominee certificate as described in the current version of IC76-12.

Special payments

Pension and similar payments – Residents of all countries

A non-resident of Canada who receives pension or similar payments and intends to file an income tax return in Canada can apply to the CRA for a reduction in the non-resident tax that you have to withhold. To do this, the non-resident must use NR5 Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld for Tax Year _____. When the request is processed, the CRA will send a letter to the non-resident and the payer(s) stating any payments to which a tax reduction applies. You may not apply a tax reduction unless you receive written authorization from the CRA. If you do receive an authorization, you must report the amounts paid or credited on an NR4 slip and use exemption code “J.”

Pension and similar payments – Residents of certain countries

Canada’s tax treaties with Algeria, Azerbaijan, Brazil, Croatia, Cyprus, Ecuador, Greece, Ireland, Italy, the Philippines, Poland, Portugal (including Azores and Madeira), Romania, Senegal, Slovenia, and Turkey include an exemption from withholding tax for certain pension and similar payments received in the year from Canada.

If a non-resident receives more than one pension or similar payment from Canada, the exemption can be applied only to a limited amount of the total payments that the non-resident receives. Each tax treaty specifies different types of pension and similar payments to which the exemption applies. Amounts over the limit, and payments that are not eligible for exemption, are taxable at the applicable rate. To determine the exempt amounts, the non-resident has to give the CRA an estimate of the total pension and similar payments the non-resident expects to receive from each of the payers.

The non-resident gives this information and requests the exemption by filing Form NR5, which has to be filed once every 5 years. When the request is processed, the CRA will send a letter to the non-resident and the payer(s) stating any payments to which the exemption applies. You may not apply the exemption unless you receive written authorization from the CRA.

Rental income from real property in Canada

A non-resident who receives rental income from real property in Canada can ask that withholding agents be allowed to deduct tax on the net amount instead of the gross amount. To do this, the non-resident has to fill out Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property or Receiving a Timber Royalty.

The CRA must receive this form on or before January 1 of the tax year, for which the request applies, or on or before the date the first rental payment is due. For corporations, estates, and trusts with a fiscal year end other than December 31, the CRA must receive their Form NR6 on or before the first day of their fiscal year.

Although the CRA accepts Form NR6 throughout the year, the effective date for withholding on the net amount will be the first day of the month in which the CRA receives the form. You have to withhold tax on any gross rental income paid or credited to a non-resident before that date. In all situations, when Form NR6 is filed, you still have to report the gross amount of rental income for the entire year on an NR4 slip and use exemption code “H.”

Retirement compensation arrangement

When a custodian makes a distribution out of a retirement compensation arrangement (RCA) trust to a non-resident beneficiary, the custodian will apply for a non-resident account (beginning with the letters NRQ) by completing Form T735, Application for a Remittance Number for Tax Withheld from a Retirement Compensation Arrangement (RCA). This non-resident account will be used to report payments made to the non-resident beneficiary and the income tax withheld on these payments. For more information on how to complete Form T735, see T4041, Retirement Compensation Arrangements Guide.

For more information on RCAs, go to Retirement compensation arrangements.

Film and video acting services

A non-resident actor, who receives payments for acting services rendered in Canada and intends to file an income tax return in Canada, can apply to the CRA for a reduction in the non-resident tax that you have to withhold.

To do this, the non-resident must fill out one of the following:

• Form T1287, Application by a Non-Resident of Canada (Individual) for a Reduction in the Amount of Non-Resident Tax Required to be Withheld on Income Earned from Acting in a Film or Video Production
• Form T1288, Application by a Non-Resident of Canada (Corporation) for a Reduction in the Amount of Non-Resident Tax Required to be Withheld on Income Earned from Acting in a Film or Video Production

When these forms are processed, the CRA will send a letter to the non-resident and the Canadian payer stating any payments to which a tax reduction applies.

A non-resident actor who resides in the United States, and makes less than $15,000 CAD from acting services performed in Canada, in the calendar year, may be eligible for an exemption from tax under Article XVI of the Canada – United StatesTax Convention. The actor can apply for a reduction of the non-resident tax that you have to withhold, as stated above.

You may not apply a tax reduction unless you receive written authorization from the CRA. If you do receive this authorization, you must report the amounts paid or credited on an NR4 slip and use exemption code “J.”

For more information, go to Non-resident actors.

Mutual fund investment distributions

Taxable Canadian property gains distributions

Non-residents who invest in Canadian mutual fund investments may be taxable on capital gains distributions made by mutual fund trusts and on capital gains dividends paid by mutual fund corporations from the disposition of taxable Canadian property (TCP). TCP includes real property in Canada, Canadian resource properties, and Canadian timber resource properties.

This non-resident tax applicable to TCP gains distributions only applies if more than 5% of the total capital gains dividend paid by a mutual fund corporation and more than 5% of the total capital gains distribution paid by a mutual fund trust are paid or designated for non-resident persons. Mutual fund trusts and mutual fund corporations have to maintain a separate TCP gains distribution account to track all capital gains for the disposition of TCP. The mutual fund has to report these amounts and the withholding tax on an NR4 slip.

Assessable distributions

Non-residents who invest in Canadian property mutual fund investments are taxable at a rate of 15% on any amount not otherwise taxed that the mutual fund pays or credits them. A Canadian property mutual fund investment is an exchange-listed mutual fund that derives more than 50% of its unit or share value from real property in Canada, Canadian resource properties, or Canadian timber resource properties. The mutual fund has to report these amounts, called assessable distributions, and the withholding tax on an NR4 slip.

Generally, the 15% tax withheld on the assessable distributions is considered the final tax obligation to Canada on that income.

A non-resident investor may apply any loss realized on the disposition of a Canadian property mutual fund investment against assessable distributions received, up to the amount of the total assessable distributions paid or credited on the investment. The non-resident investor applies the loss and can claim any resulting refund by filing Form T1262, Part XIII.2Tax Return for Non-Resident’s Investments in Canadian Mutual Funds. Unused amounts of this special form of capital loss, which can be used only for this purpose, may be carried back three tax years or carried forward indefinitely.

Remitting deductions

When to remit

You have to remit your non-resident tax deductions so that the Canada Revenue Agency (CRA) receives them on or before the 15th day of the month following the month the amount was paid or credited to the non-resident. The CRA considers the remittance to be received on the date it is received at your Canadian financial institution or at the CRA.

If your business or activity ceases during the year, you have to remit your non-resident tax deductions so that the CRAreceives them no later than seven days after the day your business or activity ceases.

Are you a new remitter?

If you have never remitted non-resident income tax deductions, contact the CRA at the numbers listed at the end of this guide. The CRA will give you a non- resident account number and tell you how to remit your deductions. The CRA will mail you Form NR75, Non-Resident Tax Account Information, which will show the information you gave CRA when you opened your non-resident account number and which includes a non-resident tax remittance voucher that you should return with your first remittance.

If you have not received Form NR75 in time to make your first payment, prepare a letter that states:

• the name under which your account was opened, as well as your address and telephone number
• the year and month your payment covers
• your non-resident account number

Make your payment payable to the Receiver General. Send your payment and letter to the following address:

Canada Revenue Agency
Post Office Box 3800, Station A
Sudbury ON  P3A 0C3
CANADA

After you make your first remittance, the CRA will send you Form NR76, Non-Resident Tax Statement of Account, which includes a non-resident tax remittance voucher that you can use for your next remittance.

How to make a remittance

If you make a payment that your financial institution does not honour (including a payment on which you put a “stop-payment”), the CRA will charge you a fee.

For more information, go to Make a payment to the Canada Revenue Agency.

Online payment methods

Online or telephone banking

Some financial institutions let you set up payments to be sent to the CRA on pre-set dates. Businesses have to make their remittances using a business bank account.

Make sure you correctly enter your non-resident account number and the period the remittance covers. For help remitting your non-resident deductions through online banking, please contact your financial institution.

My Payment

My Payment is an electronic payment service offered by the CRA that uses Visa Debit, Debit MasterCard or Interac Online for individuals and businesses to make payments directly to the CRA from their bank access cards. Your transaction total cannot be more than the daily withdraw limit that your financial institution set.

Use this service to make payments to one or more CRA accounts, from your personal or business account, in one simple transaction. For more information, go to My Payment.

Pre-authorized debit

Pre-authorized debit is an online, self-service payment option. Use it to authorize the CRA to withdraw a pre-set payment from your bank account to remit tax on one or more dates. You can set up a pre-authorized debit agreement using the CRA’s secure My Account for Individuals or My Business Account. For more information, go to Pay by pre-authorized debit.

Third-party service provider

You may be able to make your payments through a third-party service provider. The third-party service provider will send your Part XIII tax deductions and remittance details to the CRA electronically.

Other payment methods

Wire transfers

Non-residents who do not have a Canadian bank account can pay using wire transfers. For more information, go to Pay by wire transfer for non-residents.

Pay at your Canadian financial institution

You can make your payment at your financial institution in Canada. To do so, you need a personalized remittance voucher.

Non-Resident TeleReply

If you are reporting a nil remittance of non-resident withholding tax on your account or you are no longer making payments and would like to permanently discontinue the account, you can call Non-Resident TeleReply at 1-866-971-4644. For more information, go to Non-Resident TeleReply.

Missing or lost remittance voucher

Even if you do not have a remittance voucher, you still have to send the CRA your payment by the due date. If you do not receive a remittance voucher in time to make your next remittance, or if you have misplaced it, send your payment payable to the Receiver General. Include a short note that states your name, address, and non-resident account number, and the year and month covered by the payment.

To order Form NR92, Non-Resident Tax Remittance Voucher, call the CRA at 1-855-284-5946 from anywhere in Canada and the United States or at 613-940-8499 from outside of Canada and the United States. The CRA accepts collect calls by automated response. You may hear a beep and experience a normal connection delay.

Non-resident tax notice of assessment, notice of reassessment, or notice of collection

If you receive Form NR81, Non-Resident Tax Notice of Assessment, Form NR82, Non-Resident Tax Notice of Reassessment, or Form NR83, Non-Resident Tax Notice of Collection, use only the remittance vouchers attached to these forms to make your payment for any balance owing.

Applying for a refund of tax overpayments

To get a refund of excess or incorrectly withheld Part XIII tax, a non-resident has to fill out and send Form NR7-R, Application for Refund of Part XIII Tax Withheld. The CRA has to receive this form no later than two years from the end of the calendar year in which the tax was sent to the CRA.

You may be a non-resident of Canada filing Form NR7-R. If so, you can ask the CRA to deposit your refund directly into your bank account at a Canadian financial institution by filling out and attaching Form NR304, Direct Deposit Request for Non-Resident Account Holders and NR7-R Refund Applicants. The name on the account must match the name of the applicant or the authorized person who signs the certification section on Form NR7-R. For more information, go to Direct deposit.

Residents of Canada who receive an NR4 slip with non-resident tax withheld can get a credit for the amount withheld by including the slip with their Canadian income tax return.

For more information on Part XIII tax, see the current version of Information Circular IC77-16, Non-Resident Income Tax.

NR4 slips

When to fill out the NR4 slip

You have to fill out an NR4 slip for every non-resident to whom you paid or credited amounts described under Part XIII of the Income Tax Act, even if you are not required to deduct any tax. See Appendix B for a list of types of income.

You also have to fill out an NR4 slip if you are considered, under Part I or Part XIII of the Income Tax Act, to have paid or credited amounts. You have to fill out an NR4 slip even if you did not withhold tax on these amounts, or you did not have to withhold tax on these amounts due to an exemption under the Income Tax Act or a bilateral tax treaty.

Reporting limits

You have to report amounts on an NR4 slip if the gross income paid or credited during the year is $50 or more. However, if you paid less than $50 and you still withheld tax under Part XIII, you have to report the gross income and the tax withheld on an NR4 slip.

Customized NR4 slips

For those who fill out a large number of slips, the CRA accepts certain slips other than its own. For help on how to fill out the slips accurately, consult the guidelines for the production of customized forms at customized forms or see the current version of Information Circular IC97-2R, Customized Forms.

Filling out the NR4 slip

Follow the instructions in this section carefully. The CRA may have to return incorrectly completed NR4 slips to you for corrections.

• Make sure your NR4 slips are easy to read. To help the CRA process your returns quickly and accurately, type or machine print your information slips.
• Do not change the headings of any of the boxes.
• Prepare separate NR4 slips whenever non-residents change their country of residence for tax purposes during the year.
• Report gross income (box 16 or 26) in Canadian funds.
• Report the tax withheld (box 17 or 27) in Canadian funds.
• Use separate lines when you report income that is partially exempt. For example, if you are paying interest to a client and a part of the gross income is exempt from Part XIII tax, report the taxable income on one line with the withholding tax and the exempt income on another line, with the correct exemption code stated in box 18 or 28.
• Report income on line 1 before you report income on line 2.

Filling out the boxes

Box 10 – Year

Enter the four digits of the calendar year in which you made the payment to the recipient. For estates and trusts, enter the four digits of the tax year-end in which they made the payment to the recipient.

Box 11 – Recipient code

Enter the appropriate code from the following list:

Box 12 – Country code for tax purposes

From the list in Appendix A, enter the three letter code for the country in which the recipient is a resident for tax purposes. Only use the codes listed in Appendix A. Generally, the recipient’s country for tax and mailing purposes will be the same. However, if they are different, you must always enter the country of residency for tax purposes. For more information about residency and tax treaty benefits, see the procedures listed under Beneficial ownership and tax treaty benefits.

Payer or agent identification number

Enter the number your organization assigns to non-resident payees. For example, if you are a financial institution, enter the number assigned to your client (such as an annuitant number or client number) in this box. If you do not use such a number, leave this area blank.

Box 13 – Foreign or Canadian tax identification number

Enter the identification number assigned to the non-resident for tax purposes by their country of residence. If a non-resident does not give you an identification number, ask if a Canadian social insurance number (SIN) is available and enter the number here.

Box 14 or 24 – Income code

Enter the appropriate numeric income code from the list in Appendix B. For example, enter income code “31” to identify a lump-sum payment from a deferred profit sharing plan.

Use the proper two-digit code. For example, copyright royalties should be reported using “05” not “5.”

Box 15 or 25 – Currency code

All income and withholding tax should be reported in Canadian funds. Enter currency code CAD. If you cannot report the amounts in Canadian funds, enter the three-letter code of the currency for the amounts reported as gross income (box 16 or 26) and non-resident tax withheld (box 17 or 27). See Appendix D for a list of the currency codes.

Box 16 or 26 – Gross income

Enter in Canadian funds the gross income you paid or credited to non-residents of Canada if one of the following applies:

• the amount paid or credited, or deemed paid or credited under Part I or Part XIII of the Income Tax Act is $50 or more
• any amount of Part XIII tax has been withheld

In addition, payers of rental income have to enter the gross rental income, and film industry payers have to enter the gross income for acting services, even if no tax was withheld on some or all of the income.

See the Note under Box 15 or 25 – Currency code.

Box 17 or 27 – Non-resident tax withheld

Enter in Canadian funds the amount of non-resident tax you withheld. If you cannot convert foreign funds to Canadian currency, fill in box 15 or 25 (currency code), in order to clearly show on the NR4 slip the currency of the tax you withheld. This will help the CRA and the non-resident.

See the Note under Box 15 or 25 – Currency code.

Box 18 or 28 – Exemption code

Enter the exemption code that applies from the list in Appendix C. This code identifies the section of the Income Tax Actor a bilateral tax treaty that gives the authority to exempt the amount from Part XIII withholding tax, or to apply a reduced withholding rate, as a result of certain elections.

If no tax is withheld, the correct exemption code must be included.

Non-resident recipient’s name and address

If you are preparing the NR4 slip for an individual, enter their last name, followed by the first name and initial. Otherwise, enter the name of the corporation, organization, association, trust, or institution.

If it applies, enter the second recipient’s name. If this is not a joint account or there is only one recipient, leave this line blank.

Enter the recipient’s full mailing address as follows:

Lines 1 and 2 – Enter the street address, (civic number, street name, and post office box number or rural route number).

Line 3 –

• For Canadian addresses, enter the city, two-letter provincial or territorial code (as found in Appendix E), and the postal code.
• For U.S. addresses enter the city, two-letter state, territory or possession code (as found in Appendix E), and the ZIP code.
• For addresses outside Canada and the United States enter the postal code and then the city name.

Line 4 – Enter the full country name (if Canada, leave blank but enter CAN in the country code box).

Country code – Enter the three-letter country code from Appendix A that corresponds to the country you entered on line 4. This country code is for mailing purposes only.

Name and address of payer or agent

Enter your full name and address.

Non-resident account number

Enter the account number under which you remit your non-resident tax deductions to us. This number has to match the account number shown on the remittance part of Form NR76, Non-Resident Tax Statement of Account.

Distributing copies of the NR4 slips

You must give recipients their NR4 slips on or before the last day of March after the calendar year the slips apply to. For estates or trusts, give the copies no later than 90 days after the end of the estate’s or trust’s tax year. If you do not, the CRA may assess you a penalty. The penalty for failing to distribute NR4 slips to recipients is $25 per day for each such failure with a minimum penalty of $100 and a maximum of $2,500.

Print the two NR4 slips that you have to give to each recipient on one sheet.

Give each of your recipients their NR4 slip in one of the following ways:

• one copy sent electronically (for example, by e-mail) if you have the recipient’s written consent on paper or in electronic format to send the NR4 slip electronically
• two copies, sent by mail to the recipient’s last known address
  Notes
  If NR4 slip copies are not deliverable, you may want to keep the copies with the recipient’s file.
  If you know that the address you have for a recipient is not correct, do not send the recipient’s NR4 slip copies to that address. Document why the copies were not sent and your efforts to get the correct address. Keep this information with the NR4 slips copies in the recipient’s file. You still have to include that NR4 slip information in your NR4 information return when you file it.
• two copies, delivered in person.

Keep the information from the NR4 slips in your records.

NR4 Summary

The NR4 Summary records the totals of amounts that you report on NR4 slips and on Form NR601, Non-Resident Ownership Certificate – Withholding Tax, and Form NR602, Non-Resident Ownership Certificate – No Withholding Tax.

Filling out the NR4 Summary

Use the information on the NR4 slips, Forms NR601, and NR602 to fill out the summary, as described below. All amounts should be entered in Canadian funds.

Year-end

Enter the four digits of the calendar year to which the information return relates.

Line 1 – Non-resident account number

Enter the account number under which you remit your non-resident tax deductions to the CRA. This number has to match the account number shown on the remittance part of Form NR76, Non-Resident Tax Statement of Account.

Name and address of payer or agent

Enter your name and address. Your name has to match the one shown on the remittance part of Form NR76, Non-Resident Tax Statement of Account.

Line 88 – Total number of NR4 slips filed

Enter the total number of all the slips included with this summary.

Lines 18 and 22 – Amounts reported on NR4 slips

Add the amounts in boxes 16 and 26 from all slips. Enter the total on line 18.

Add the amounts in boxes 17 and 27 from all slips. Enter the total on line 22.

Lines 26 and 28 – Amounts reported on forms NR601 and NR602

Add the gross income you reported on forms NR601 and NR602. Enter the total on line 26.

Add the non-resident tax withheld you reported on forms NR601. Enter the total on line 28.

Line 30 – Total

Add the amounts reported on lines 18 and 26. Enter the total on line 30.

Line 32 – Total non-resident tax withheld

Add the amounts reported on lines 22 and 28. Enter the total on line 32.

Line 82 – Minus: Total remittances for the year

Enter the total you remitted to your non-resident tax account for the applicable tax year.

Difference

Subtract line 82 from line 32. Enter the difference in the space given. If there is no difference between the total non-resident tax withheld and the remittances for the year, enter “nil” on line 86. Generally, the CRA does not charge or refund a difference of $2 or less.

Line 84 – Overpayment

If the amount from line 82 is more than the amount on line 32 (and you do not have to file another return for this account number), enter the difference on line 84. Send a note giving the reason for the overpayment and whether you want the CRA to transfer this amount to another account or another year, or refund the overpayment to you.

Direct deposit is available for refunds of non-resident tax. To register, send the CRA a completed Form NR304, Direct Deposit Request for Non-Resident Account Holders and NR7-R Refund Applicants. For more information, go to Direct deposit.

Line 86 – Balance due

If the amount on line 32 is more than the amount on line 82, enter the difference on line 86. If you have a balance due, attach a payment to your NR4 Summary or send your payment separately for the balance owing. If you remit your payment late, any balance due may be assessed penalties and interest at the prescribed rate.

To help the CRA process your payment correctly, write your non-resident account number on it.

Lines 76 and 78 – Person to contact about this return

Enter the name and telephone number of a person that the CRA can contact for more information.

Certification

An authorized officer has to sign the NR4 Summary to confirm that the information is correct and complete.

NR4 information return

The NR4 information return is due on or before the last day of March following the calendar year to which the information return applies, or no later than 90 days after the end of the estate’s or trust’s tax year.

Loss restriction event

A tax year of a trust or an estate may end early because of a loss restriction event (LRE). The CRA calls this a “pre-LRE year-end.” When the pre-LRE year-end is in the same calendar year as the trust’s or the estate’s ordinary tax year end, the NR4 information return must be filed within 90 days of the trust’s or the estate’s ordinary tax year end.

When the pre-LRE year-end is not in the same calendar year as the trust’s or the estate’s ordinary tax year end, there are two scenarios:

• for mutual fund trusts that filed an election to have a tax year end of December 15 and the pre-LRE year-end is after December 15 of that calendar year, the NR4 information return must be filed within 90 days of that December 15 tax year-end
• in any other case, the NR4 information return must be filed within 90 days of the end of the calendar year the pre-LRE year-end is in

For more information about loss restriction events, see “Loss trading – Rules for trusts” in Guide T4013, T3 Trust Guide.

When the due date falls on a Saturday, a Sunday, or a public holiday recognized by the CRA, your information return is considered on time if the CRA receives it or if it is postmarked on or before the next business day.

If you fail to file it on time, the CRA can assess a penalty. See Penalties, interest and other consequences.

An NR4 information return must be completed even if any of the forms NR5, NR6, T1287, T1288 or an actor election has been filed.

If your business or activity ceases during the year, you have to file an NR4 information return within 30 days of ending your business or stopping your activity.

Electronic filing methods

Internet filing will be available starting January 7, 2019.

You must file information returns by Internet if you file more than 50 information returns (slips) for a calendar year.

Filing by Web Forms

The CRA’s Web Forms application is free and secure. To use it, all you need is access to the Internet. With Web Forms you can file an information return easily, following the step-by-step instructions.

Web Forms lets you:

• file up to 100 slips (original, additional, amended, or cancelled) from the CRA’s website
• calculate all of the totals for the summary
• create an electronic information return containing slips and a summary, which you can save and import at a later date
• print all your slips and your summary
• validate data in real time

After you submit your information return, you will receive a confirmation number that will be your proof that the CRA received it.

To use the Web Forms application, you must have a web access code. If you do not have a web access code, you can easily get one online or by calling the CRA. For more information, see Web access code.

To start using this application or to get more information about Web Forms, go to Filing Information Returns Electronically (T4/T5 and other types of returns) – Overview.

Filing by Internet File Transfer (XML)

This method allows you to transmit an original or amended return with a maximum file size of 150 MB to the CRA. All you need is a web browser to the Internet, and your software will create, print, and save your electronic information return in XML format.

If you use commercial or in house-developed payroll software to manage your business, you can file up to 150 MB by Internet File Transfer. For example, a service bureau can file multiple returns in one submission, as long as the total submission does not exceed the 150 MB restriction.

For more information about this filing method, contact your software provider or go to Filing Information Returns Electronically (T4/T5 and other types of returns) – Overview

Web access code

To file your return over the Internet using the Internet file transfer or Web Forms service, you will need an account number and its associated web access code (WAC), unless you are filing through My Business Account or Represent a Client. If you do not remember your code or you need a code for a new account, go to What is a Web access code? to access the web access code online service or call the e-Services Helpdesk at 1-855-284-5946 or 613-940-8499.

Filing on paper

You can still file up to 50 slips on paper. However, we strongly encourage you to file online using Internet File Transfer or Web Forms. We explain these options under Electronic filing methods.

If you need more paper copies, you can order up to 9 single page slips at Forms and publications or by calling 1-800-959-5525. There are two slips per page intended to be printed, typed, or filled out by hand.

If you choose to file your return on paper, mail it to this address:

Jonquière Tax Centre
NR4 Program
Post Office Box 1300 LCD Jonquière
Jonquière QC  G7S 0L5
CANADA

Fill out one copy of the NR4 slip for each non-resident and send them to the CRA with your NR4 Summary. Enter the information for two different non-residents on one sheet. You must keep the information from the NR4 slips and the NR4 Summary or a copy of these forms for your files.

After you file

When the CRA receives your information return, we check it to see if you have prepared it correctly. After an initial review, the CRA enters your return into its processing system, which captures the information and performs various validity and balancing checks. If there are problems, the CRA may contact you.

After filing your information return, you may notice that you made an error on an NR4 slip. If so, you will have to prepare an amended slip to correct the information.

Amending or cancelling slips over the Internet

To amend a slip over the Internet, change only the information that is incorrect and retain all of the remaining information that was originally submitted. Use summary report type code “A” and slip report type code “A.”

To cancel a slip, do not change any information that was contained on the original slip. Use summary report type code “A” and slip report type code “C.”

For more information about amending or cancelling information returns using the Internet, go to Filing Information Returns Electronically (T4/T5 and other types of returns).

If you amend or cancel slips using the Internet, the CRA may contact you to find out why.

Amending or cancelling slips on paper

If you choose to file your amended return on paper, clearly identify the slips as amended or cancelled by writing “AMENDED” or “CANCELLED” at the top of each slip. Make sure you fill out all the necessary boxes, including the information that was correct on the original slip. Send two copies of the amended slips to the non-resident.

If you have to change financial data on the amended slips, prepare and file an amended NR4 Summary showing the revised totals. Clearly write “AMENDED” at the top of the summary.

Send one copy of the amended or cancelled slips and NR4 Summary, along with a letter explaining the reason for the amendment, to the Sudbury Tax Centre listed at the end of this guide.

Adding slips

After you file your information return, you may discover that you need to send additional slips. If you have original slips that were not filed with your return, file them separately either electronically or on paper.

To file additional slips electronically, see Electronic filing methods.

When submitting additional slips on paper, clearly identify the new slips by writing “ADDITIONAL” at the top of each slip.

File an NR4 Summary for the additional slips showing the revised totals. Clearly write “ADDITIONAL” at the top of the summary.

Send one copy of the additional slips, and NR4 Summary along with a letter explaining the reason for the addition, to the Sudbury Tax Centre. The address is at the end of this guide.

Replacing slips

If you issue NR4 slips to replace copies the non-residents lost or destroyed, do not send copies of these slips. Clearly identify them as “DUPLICATE” copies, and keep them with your records.

Special reporting situations

Non-resident ownership certificates

If you are an agent or another person who pays interest or dividends when bearer coupons or warrants are redeemed for a non-resident, you have to fill out one of the following forms:

• Form NR601, Non-Resident Ownership Certificate – Withholding Tax, if you withheld non-resident tax
• Form NR602, Non-Resident Ownership Certificate – No Withholding Tax, if you did not withhold non-resident tax

Form NR601, Non-Resident Ownership Certificate – Withholding Tax

If you are an encashing agent, use Form NR601 to report interest, dividend coupons, or warrants that require you to withhold Part XIII non-resident tax. Fill out all of the following items on Form NR601:

• name of owner
• description of security
• taxable amount and tax withheld
• beneficial owner’s name and country of residence
• encashing agent’s name, address, telephone number, and non-resident account number

Form NR602, Non-Resident Ownership Certificate – No Withholding Tax

If you are an encashing agent, use Form NR602 to report interest, dividend coupons, or warrants that do not require you to withhold Part XIII non-resident tax. Fill out all of the following items on Form NR602:

• beneficial owner’s name and address
• encashing agent’s name, address, telephone number, and non-resident account number
• description of security
• total amount received in Canadian funds
• certification (the reason a payment is exempt from Part XIII withholding tax)

The owner or agent has to certify that the information given on Form NR601 or Form NR602 is true and correct.

Distributing copies

Send one copy of Form NR601 or Form NR602 (or both) to the Sudbury Tax Centre, at the address listed at the end of this guide. You have to do this no later than the 15th day of the month following the cashing of the interest coupons or dividend warrants.

Give one copy of Form NR601 or Form NR602 to the non-resident owner or agent at the time of the cashing.

Keep one copy of Form NR601 or Form NR602 for your records. The information on these forms will help you fill out lines 26 and 28 of your NR4 Summary.

Appendix A – Country codes for tax purposes

Enter the appropriate three-letter code in box 12 of the NR4 slip. Please note that these codes should also be used in the address portion of the NR4 slip.

For more information, refer to the International organization for standardization ISO 3166 codes called, Codes for the representation of names of countries and their subdivisions, on the Online Browsing Platform (OBP).

Appendix B – Income codes

Enter the appropriate income code in box 14 or 24 of the NR4 slip. Use the correct two-digit code. For example, for copyright royalties, use code “05”, not “5.”

Pension and similar payments

Mutual fund investment distributions

Interest and dividends

Rents, royalties, and franchise payments

Miscellaneous payments

Appendix C – Exemption codes

Exemptions applicable to dividends only

Exemptions applicable to rents, royalties, and similar payments only

Authorization to apply a reduced rate of withholding

Exemptions applicable to management or administration fees or charges

Exemptions for payments made to non-resident tax-exempt persons

Other exemptions

Appendix D – Currency codes

Use the correct three-letter code in box 15 or 25 of the NR4 slips. The amounts entered for gross income and tax withheld are reported in the same currency as stated by the currency code. The CRA will convert amounts reported in foreign currency to Canadian funds based on the average annual exchange rate published by the Bank of Canada.

Appendix E – Canadian province or territory or U.S. state, territory, or possession codes

Use the following abbreviations when you enter the Canadian province or territory, or U.S. state, territory or possession on the slip and summary.

Canada

United States

Online services

Authorizing the withdrawal of a pre-determined amount from your Canadian chequing account

Pre-authorized debit (PAD) is a secure online, self-service, payment option for individuals and businesses. This option lets you set the payment amount you authorize the CRA to withdraw from your Canadian chequing account to pay your tax on a specific date or dates you choose. You can set up a PAD agreement using the CRA’s secure My Business Account service at My Business Account. PADs are flexible and managed by you. You can view historical records, modify, cancel, or skip a payment. For more information, go to Pay by pre-authorized debit.

Electronic payments

Make your payment using:

• your financial institution’s online or telephone banking services
• the CRA’s My Payment service at My Payment
• your credit card through one of the CRA’s third party service providers
• pre-authorized debit at My Business Account

For more information on all payment options, go to Make a payment to the Canada Revenue Agency

For more information

What if you need help?

If you need more information after reading this guide, go to Individuals – Leaving or entering Canada and non-residentsand select the topic “Payments to non- residents”, or call one of the following telephone numbers:

• 1-855-284-5946, From anywhere in Canada and the United States
• 613-940-8499, From outside Canada and the United States
• 1-866-765-8460 or 705-677-7712, Fax

We accept collect calls by automated response. You may hear a beep and experience a normal connection delay.

Direct deposit

Direct deposit is a fast, convenient, reliable, and secure way to get your CRA payments directly into your account at a financial institution in Canada. To enrol for direct deposit or to update your banking information, go to Direct deposit.

Forms and publications

To get our forms and publications, go to Forms and publications or call one of the following numbers:

• 1-800-959-5525, from Canada and the United States
• 613-940-8497, from outside Canada and the United States. We accept collect calls by automated response. Contact your service provider or operator to initiate the collect call. You may hear a beep and experience a normal connection delay.

Electronic mailing lists

The CRA can notify you by email when new information on a subject of interest to you is available on the website. To subscribe to the electronic mailing lists, go to Canada Revenue Agency electronic mailing lists.

Teletypewriter (TTY) users

If you have a hearing or speech impairment and use a TTY, call 1-800-665-0354.

If you use an operator assisted relay service, call our regular telephone numbers instead of the TTY number.

Addresses

Jonquière Tax Centre
Post Office Box 1300 LCD Jonquière
Jonquière QC  G7S 0L5
CANADA

Sudbury Tax Centre
Post Office Box 20000, Station A
Sudbury ON  P3A 5C1
CANADA

Service-related complaints

You can expect to be treated fairly under clear and established rules, and get a high level of service each time you deal with the Canada Revenue Agency (CRA); see the Taxpayer Bill of Rights.

If you are not satisfied with the service you received, try to resolve the matter with the CRA employee you have been dealing with or call the telephone number provided in the CRA‘s correspondence. If you do not have contact information, go to Contact information – Canada Revenue Agency.

If you still disagree with the way your concerns were addressed, you can ask to discuss the matter with the employee’s supervisor.

If you are still not satisfied, you can file a service complaint by filling out Form RC193, Service-Related Complaint.

For more information and how to file a complaint, go to Make a service complaint.

If the CRA has not resolved your service-related complaint, you can submit a complaint with the Office of the Taxpayers’ Ombudsman.

Formal disputes (objections and appeals)

If you disagree with an assessment, determination, or decision, you have the right to register a formal dispute.