CRA indicates that participation in Canadian board meetings by telephone from outside Canada is not the exercise of the office in Canada

Regarding non-resident directors who participate outside Canada and by telephone at board meetings of a resident corporation held in Canada, CRA stated:

[A] non-resident director located outside Canada who participates in a meeting of the board of directors of a corporation resident in Canada held in Canada by means of a telephone system, or by means of any other telecommunications system, generally does not thereby realize income from an office or employment exercised in Canada. In those circumstances, the telephone system, or any other similar system, appears to us to be used as a means of transmitting services rendered from outside Canada.

CRA further indicated that, in the context of the directors not previously having been Canadian residents, their fees also would be exempted from withholding under Reg. 104(2).

Neal Armstrong. Summary of 17 December 2018 Internal T.I. 2016-0659031I7 F under s. 115(1)(a)(i) and Reg. 104(2).