CRA confirms that Reg. 105 applies to services rendered in Canada by a US government department directly or through a contractor

After noting that a “service is generally considered to be rendered in Canada when the individuals performing the service are physically present in Canada,” CRA confirmed that the usual Reg. 105 withholding rules would apply to a U.S. government department that rendered services in Canada in person, either directly or through a contractor hired by it.

CRA further stated that “in most circumstances we can envision, a treaty-based exemption appears to be likely,” which could ground an application for a waiver under s. 153(1.1).

Neal Armstrong. Summary of 12 November 2025 Internal T.I. 2025-1080641I7 under Reg. 105(1).