reg non residence tax return

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dev (anonymous) Posted 3 days ago MadanCA Team restored answer 2 days ago

Hi Allan thanks for your reply but if 216 tax return cannot be filed under VDP .Can I use form 1159 to file 10 year tax returns or regular t1 form to declare non disclosed rental Inocme and pay 25% tax on gross rental Income.Remaining unfiled taxes since 1995 I expalin in the narrative.

I REALLY PAARICATE DETAILED REPLY FROM YOUR SIDE sent earlier

1 Answer

score 0 · Answer 1 · 2026-01-17T18:44:01+00:00

Hi Dev, thank you for the clarification and for your kind words.

To answer your questions directly:

1) Can Form T1159 be used to file 10 years of tax returns?

No. Form T1159 is only the VDP application form.

It is not a tax return and it cannot be used to report rental income or calculate tax. It is used to request VDP relief, together with the required filings or calculations that CRA asks for.

2) Can a regular T1 be filed to report rental income and pay 25% of gross rent?

Generally, no.

If Section 216 is not used or not accepted, non-resident rental income is taxed under Part XIII at 25% of gross rents. That tax is normally dealt with through withholding and assessment, not by filing a regular T1 return.

A T1 return is generally only appropriate if a Part I filing obligation exists, such as an accepted Section 216 or Section 217 return.

3) What is the correct approach if late Section 216 is not available?

The usual approach is:

Submit a VDP application (Form T1159) with a full narrative, explaining:
- rental activity since 1995,
- reason for non-compliance, and
- confirmation the disclosure is voluntary and complete.
CRA will typically focus on the most recent 10 years, even though the full history is disclosed.
The rental income is then dealt with as a Part XIII issue, i.e. 25% tax on gross rents, with:
- penalty relief under VDP, and
- interest generally still applying.

4) What about CRA’s Section 216 late-filing policy?

This is a separate process from VDP.

CRA may, at its discretion, accept late-filed Section 216 returns under its administrative policy. If accepted:

rental income is taxed on net income, and
penalties are generally waived (interest usually applies).

If CRA does not accept the late-216 request, they revert to 25% gross tax under Part XIII.

5) Years prior to 10 years

Yes, it is appropriate to explain the full rental history back to 1995 in the narrative, even if CRA only requires filings or calculations for the most recent 10 years.

Summary:

T1159 is not a tax return
T1 returns are generally not used to pay 25% gross rental tax
VDP + Part XIII is the fallback if late Section 216 is denied
Section 216 late-filing policy is the only route to net taxation and is handled separately

reg non residence tax return

1 Answer

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