Principal Issues: What is the meaning of "any amount
available out of the rent or royalty received for remittance"?
Position: The words "any amount
available out of the rent or royalty received for remittance to the non-resident person
" refer to the amounts available for payment by the agent to the non-resident after the agent has paid allowable expenses on behalf of the non-resident. However, the CRA will allow the agent to withhold and remit Part XIII tax based on the amount that is the non-resident's net rental income. Thus, in the situation described, the agent could take into account allowable expenses paid by the non-resident.
Reasons: Subsection 216(4) provides an option for the agent of the non-resident to withhold and remit Part XIII tax based on net amounts. Generally, according to the text of subsection 216(4), those amounts will be the gross amount less any allowable expenses paid directly by the agent. However, in Guide T4144, Income Tax Guide for Electing Under Section 216, the CRA states that once a Form NR6 has been approved, the CRA will allow the agent to remit Part XIII tax based on the amount that is the non-resident's net rental income, thus allowing the agent to take into account expenses paid by the non-resident.