As a non-resident of Canada, how do I recover the withholding tax I paid on Canadian rents received?
Allan Madan, CA
Non-residents of Canada are subject to 25% withholding tax of the gross rents they receive on Canadian rental properties. By electing under Section 216 of the Canadian Income Tax Act, you only have to pay income tax on your net Canadian rental income, instead of on the gross amount.
On the Section 216 tax return, you can apply the non-resident tax withheld to offset the income taxes payable, which is usually lower. The Canada Revenue Agency will issue you a tax refund for the excess amount of tax withheld.
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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