I am a non-resident with retirement funds in Canada. What are my tax consequences if I start withdrawing?
Allan Madan, CA
As a non-resident, the withholding agent (plan issuer) will be required to withhold 25% of the payment (unless the tax treaty between Canada and your home country reduces the rate). The 25% withholding tax will be your final tax obligation to the CRA for the year so you will not be required to file a tax return to report this income.
However, it may be beneficial for you to elect under Section 217 of the Income Tax Act. Filing a Section 217 tax return may allow you to recover all or a portion of the total non-resident tax withheld. The Section 217 return is due by June 30th of the year following the calendar year in which you received the payment. If you file the Section 217 tax return after this deadline, the election will not be accepted. Therefore, it is imperative that you meet filing deadlines.
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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