I am a non-resident contractor providing services in Canada. My client is withholding 15% of my fee as withholding tax. How can I recover them?

If you believe that your actual tax liability will be less than 15% due to a tax treaty between your country and Canada or for other reasons, you may apply for the Regulation 105 Waiver in order to have the withholding tax reduced to a lower amount or even to zero.

The CRA generally recommends the applicant to apply for the Regulation 105 Waiver at least 30 days before the commencement of rendering of services in Canada or 30 days before the first payment. This is because the CRA expects the processing time to be 30 days and the acknowledgement letter from the CRA must be presented to the client before the client can reduce the withholding tax.

For a Treaty-Based waiver, you must not exceed a certain amount of days in Canada. For more information, please consult an international tax professional.

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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