On this page…

• What is a section 217 election?
• Does section 217 apply to you?
• When is your section 217 return due?
• Completing your section 217 return
• Electing under section 216.1
  • What is a section 216.1 election?
  • When is your section 216.1 return due?
  • Reducing tax withheld at source
• After you file
  • What happens to your return after we receive it?
  • When can you expect your refund?
  • When will we pay interest?
  • Income tax problems?
  • What should you do if you disagree?
  • How do you change a return?
  • Can you file a return to claim a refund for a previous year?
  • What is a voluntary disclosure?
  • What should you do if you move?
  • Should you be paying your taxes by instalments?
• Identification, income, and deductions
• Identification
  • Personal label
  • Information about your residency status
  • Marital status
  • Spouse
  • Common-law partner
  • Your spouse or common-law partner's net world income
• Goods and services tax/harmonized sales tax (GST/HST) credit application
  • Are you eligible for the GST/HST credit?
  • Receiving the credit for your children
  • Do you need to contact us?
• Information about your residency status
• Foreign income
  • How do you report foreign income and other amounts?
  • Foreign property
  • Shares of a non-resident corporation
  • Loans and transfers to non-resident trusts
  • Beneficiaries of non-resident trusts

What is a section 217 election?

Canadian payers have to withhold non-resident tax on certain types of income, including the types of income listed below, that they paid or credited to you as a non-resident of Canada. The tax withheld is usually your final tax obligation to Canada on this income.

Under section 217 of the Income Tax Act, you can choose to file a Canadian return and report the types of Canadian-source income listed on the next page. By doing this, you will pay tax on this income using an alternative taxing method and may receive a refund of some or all of the non-resident tax withheld.

Choosing to report these types of income on a Canadian return is called "electing under section 217 of the Income Tax Act." The return on which you report the income is referred to as a "section 217 return."

Does section 217 apply to you?

You have to send us a section 217 return for 2004 if you submitted Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld , for 2004 and we approved it.

You have the option of sending us a section 217 return for 2004 if you did not submit Form NR5 to us for 2004 and you received any of the following types of Canadian-source income (referred to as section 217 income) in 2004 while you were a non-resident :

• Old Age Security pension;
• Canada Pension Plan and Quebec Pension Plan benefits;
• most superannuation and pension benefits;
• registered retirement savings plan payments;
• registered retirement income fund payments;
• death benefits;
• Employment Insurance benefits;
• certain retiring allowances;
• registered supplementary unemployment benefit plan payments;
• deferred profit-sharing plan payments;
• amounts received from a retirement compensation arrangement, or the purchase price of an interest in a retirement compensation arrangement;
• prescribed benefits under a government assistance program; and
• Auto Pact benefits.

When is your section 217 return due?

Your 2004 section 217 return has to be filed on or before June 30, 2005.

If you are late in sending us your section 217 return, your election is not valid. If the correct amount of non-resident tax was not withheld, we will send you a non-resident tax assessment.

You may also be reporting Canadian-source income, other than eligible section 217 income, on the return. If you have a taxable capital gain from disposing of taxable Canadian property, or if you have to pay tax on employment income you are reporting, you have to file your return by April 30, 2005.

If you are reporting business income and you have to pay tax on that income, you have to file the return on or before June 15, 2005.

Note
If you owe tax for 2004 and do not file your return for 2004 within the dates we specified above, we will charge you a late-filing penalty. We will also charge compound daily interest starting May 1, 2005, on any unpaid amounts owing for 200 4.

Completing your section 217 return

Before you start, gather all the documents you will need to complete your return. This includes your information slips (such as your NR4 slips), receipts for any deductions or credits you plan to claim, and the following (which you will find in the centre of this guide):

• Income Tax and Benefit Return for Non-Residents and Deemed Residents of Canada;
• Schedule A, Statement of World Income;
• Schedule B, Allowable Amount of Non-Refundable Tax Credits;
• S chedule C, Electing Under Section 217 of the Income Tax Act;
• Schedule 1, Federal Tax; and
• the Federal Worksheet.

Step 1 - Write "Section 217" at the top of page 1 of your return.

Step 2 - Complete the Identification area of the return following the instructions in this guide.

Step 3 - Include the following income on your return:

• all eligible section 217 income (see the list on this page) that was paid or credited to you in 2004; and
• your 2004 Canadian-source employment and business income, and taxable capital gains from disposing of taxable Canadian property as described in the section called "Total income" of this guide.

Complete Part 1 and Part 2 of Schedule C, Electing Under Section 217 of the Income Tax Act.

Step 4 - Claim only those deductions on lines 207 to 256 that apply to you.

Step 5 - Complete Schedule A, Statement of World Income , and attach it to your return.

Step 6 - Complete Schedule 1, Federal Tax, and attach it to your return. On Schedule 1:

• Make sure you enter the correct amount on line 1 when calculating your federal tax (see the section "Federal tax and credits (Schedule 1)").
• Claim the federal non-refundable tax credits on lines 300 to 349 that apply to you.
• Complete Schedule B, Allowable Amount of Non-Refundable Tax Credits. Enter the allowable amount of non-refundable tax credits on line A on the back of Schedule 1.
• Calculate and enter the amount of surtax for non-residents and deemed residents of Canada on line B on the back of Schedule 1.
• If the amount you entered on line 1 of Schedule 1 was the amount from line 16 of your Schedule A, complete Part 3 of Schedule C to calculate the section 217 tax adjustment for line 445.

Step 7 - Complete lines 420 to 435 on the return, if they apply to you.

Step 8 - On line 437 of the return, enter the non-resident tax withheld on your section 217 income (from your NR4 information slip) plus any other amounts withheld on your information slips for any other Canadian-source income that you are reporting on this return. Complete the remainder of the return.

Note
Make sure you attach your information slips, and a completed Schedule 1, Schedule A, and Schedule C, to your return. If you make a claim without the required receipt, certificate, schedule, or form, it could delay the processing of your return.

As long as you file your section 217 return on time, we will refund any taxes withheld that are more than the amounts you owe.

Electing under section 216.1

What is a section 216.1 election?

For 2001 and following years, if you are a non-resident actor, a non-resident withholding tax of 23% applies to amounts paid, credited, or provided as a benefit to you for film and video acting services rendered in Canada. Generally, the non-resident withholding tax is considered your final tax liability on the income.

However, you can choose to include this income on a Canadian income tax return for 2004. Choosing to file this is called "electing under section 216.1 of the Income Tax Act." By doing this, you may receive a refund of some or all of the non-resident tax withheld on this income. Send your income tax return to the Film Services Unit.

When is your section 216.1 return due?

Generally, if you choose to file a return under section 216.1, your return for 2004 has to be filed on or before April 30, 2005.

If you are a self-employed individual, your return for 2004 has to be filed on or before June 15, 2005. However, if you have a balance owing, you still have to pay it on or before April 30, 2005.

Send your income tax return to the Film Services Unit that serves the province or territory where the services were rendered.

If you send us your return after the due date, your election will not be considered valid. The 23% non-resident withholding tax will be considered the final tax liability.

Note
This election does not apply to other persons employed or providing services within the movie industry, such as directors, producers, and other personnel working behind the scenes. It also will not apply to persons in other sectors of the entertainment industry, such as musical performers, ice or air show performers, stage actors or stage performers, or international speakers.

Reducing tax withheld at source

If you intend to elect under section 216.1, you can apply to us for a reduction in the required amount of non-resident tax withheld on amounts paid, credited, or provided as a benefit to you for film and video acting services rendered in Canada. You have to apply before you provide the acting services in Canada. For more information, see "Film Industry Services" on our Web site at www.cra.gc.ca/fsu.

After you file

What happens to your return after we receive it?

When we receive your return, we usually review it based on the information you provided and send you a Notice of Assessment based on that review. However, we may select your return for a more detailed review before we assess it. If so, and we ask you to give us documents to verify the deductions or credits you claimed, your assessment may be delayed. We can also carry out a more detailed review after your return has been assessed, to verify the income reported and the deductions or credits claimed.

When can you expect your refund?

We usually process returns in four to six weeks. However, we start to process returns in mid-February, so do not call before mid-March, even if you filed your return in January. If you filed your return on or before April 15, wait four weeks before you call. If you filed your return after April 15, wait six weeks before you call.

To find out about your 2004 refund, visit our Web site at www.cra.gc.ca/myaccount, use Telerefund, one of our T.I.P.S. services, or contact the International Tax Services Office.

When will we pay interest?

We will pay you compound daily interest on your tax refund for 2004. The calculation will start on whichever of the following three dates is latest:

• May 31, 2005;
• the 31st day after you file your return; or
• the day after you overpaid your taxes.

Income tax problems?

Our Enquiries staff is committed to resolving your tax-related problems by giving you accurate, timely, courteous, fair, and confidential answers to your questions. However, if a problem cannot be resolved, you can contact the Problem Resolution Program of the International Tax Services Office. The telephone number is on the back cover of this guide.

Our goal under this program is to resolve the problem within 15 working days. If we cannot do so (for example, if your situation is complex), a representative will contact you to confirm that we are working on the problem, to discuss it further (if necessary), and let you know when we expect to resolve it.

What should you do if you disagree?

If you disagree with your assessment or reassessment, contact us for more information. If you still disagree, you can make a formal objection by visiting our Web site at www.cra.gc.ca/myaccount, by sending a completed Form T400A, Objection - Income Tax Act , or a signed letter to the Chief of Appeals, Ottawa Tax Services Office, 333 Laurier Avenue West, Ottawa ON K1A 0L9, CANADA, or to the Chief of Appeals at your tax services office or tax centre on or before whichever of the following two dates is later:

• one year after the due date for the return; or
• 90 days after the date of the Notice of Assessment or Notice of Reassessment.

How do you change a return?

If you need to make a change to any return you have sent us, do not file another return for that year. Instead, make your request by visiting our Web site at www.cra.gc.ca/myaccount or by sending both of the following to the International Tax Service Office:

• a completed Form T1-ADJ, T1 Adjustment Request , or a signed letter providing the details of your request (including the years of the returns you want us to change), your social insurance number or temporary taxation number, your address, and a telephone number where we can reach you during the day; and
• supporting documents for the changes you want to make and, if you have not sent them to us before, supporting documents for your original claim.

Note
Send your Form T1-ADJ or letter separately from your return for 2004.

Previously, requests for adjustments could be considered for returns for 1985 or subsequent years. Under proposed legislation, after December 31, 2004, only requests relating to tax years ending in any of the 10 calendar years before the year you make the request, will be considered. For example, a request made in 2005 must relate to the 1995 or subsequent taxation year in order to be considered.

It usually takes eight weeks before we complete the adjustment and mail you a Notice of Reassessment.

Can you file a return to claim a refund for a previous year?

Previously, if you had not already filed a return, you could file one (other than to make an election under section 217) to claim a refund for 1985 or subsequent tax years. Under proposed legislation, after December 31, 2004, any requests relating to a refund for a previous tax year return that you are filing late will only be considered if the return is for a tax year ending in any of the 10 calendar years before the year you make the request. For example, a request made in 2005 must relate to the 1995 or a subsequent tax year in order to be considered.

If you are filing a return for a year before 2004, make sure you attach receipts for all the deductions or credits you are claiming.

What is a voluntary disclosure?

Maybe you should have filed a return for a previous year (see "Do you have to file a return?") but you did not, or you sent us an incorrect return. If so, you can voluntarily file or correct that return under the Voluntary Disclosures Program, and pay only the taxes owing (plus interest) without penalty.

Note
This program does not apply to any return for which we have started a review.

For more details, and to see if your disclosure qualifies for this program, get Information Circular 00-1, Voluntary Disclosures Program (Income Tax) , or call the Voluntary Disclosures Program officer in the Appeals Division of your tax services office or the International Tax Services Office. If you wish, you can discuss your situation first on a no-name or hypothetical basis.

Be sure to indicate clearly, on any disclosure you make, that you are submitting information under the Voluntary Disclosures Program.

What should you do if you move?

If you move, let us know your new address as soon as possible. If you use direct deposit, you also have to advise us if you change your account at your financial institution.

Keeping us informed will ensure that you keep getting any GST/HST credit and Canada Child Tax Benefit payments to which you may be entitled. Otherwise, your payments may stop, whether you receive them by cheque or by direct deposit. We also need to know your new address to mail you your return package for next year.

You can tell us your new address by phone or in writing. If you are writing, send your letter to the International Tax Services Office. Make sure you sign it, and include your social insurance number or temporary taxation number, your new address, and the date of your move. If you are writing for other people, including your spouse or common-law partner, include their social insurance numbers or temporary taxation numbers, and have each of them sign the letter authorizing the change to his or her records.

Note
Because an individual's personal information is confidential, generally we will not provide a change of address to other government departments or Crown corporations, such as Canada Post. Similarly, they do not provide such information to us.

Should you be paying your taxes by instalments?

You may have to pay your taxes by instalments if not enough income tax is withheld from your income. To find out if you have to pay your taxes for 2005 by instalments, estimate your taxes and credits for 2005 using your return for 2004. Enter those amounts in the chart on the Federal Worksheet in the centre of this guide. The chart contains the most common factors to consider.

If our records show that you may have to pay your taxes by instalments, we will send you an Instalment Reminder in advance, showing the amount we suggest you pay and the date the payment is due.

You can authorize us to withdraw your instalment payments automatically from your account at a financial institution in Canada. To do so, or for more information, get Form T1162A, Pre-Authorized Payment Plan (Personal Quarterly Instalment Payments) .

For more information about instalment payments or instalment interest charges, get pamphlet P110, Paying Your Income Tax by Instalments .

Identification, income, and deductions

Identification

Follow the instructions on the return to complete this area. Incomplete or incorrect information may delay the processing of your return and any refund, credit, or benefit, such as any GST/HST credit and Canada Child Tax Benefit payments you may be entitled to receive.

Non-residents electing under section 217 - At the top of page 1 of your return, write "Section 217."

Non-residents electing under section 216.1 - At the top of page 1 of your return, write "Actor's Election."

Personal label

If you have a personal label, attach it to your return. If your name, address, or social insurance number (SIN) or temporary taxation number (TTN), or your spouse or common-law partner's SIN or TTN is incorrect, put a line through the wrong information, and print your changes clearly on the label.

We may modify part of your address to meet Canada Post's requirements. Therefore, the address on your package, your Notice of Assessment, or other correspondence we send you may be different from the one you indicate on your return.

Information about your residency status

On the first line, "Other" has already been entered for you as your province or territory of residence on December 31, 2004.

On the second line, if you were self-employed in 2004, enter the province or territory where you had a permanent business establishment. If you had a permanent business establishment outside Canada, enter "other."

Marital status

Check the box that applied to your status on December 31, 2004. Check "Married" if you had a spouse (see below), or "Living common law" if you had a common-law partner (see later in this section). You still have a spouse or common-law partner if you were living apart for reasons other than a breakdown in your relationship. Check one of the other boxes only if neither of the first two applied.

Spouse

This applies only to a person to whom you are legally married.

Common-law partner

This applies to a person of the opposite or same sex who is not your spouse (see above), with whom you live and have a relationship and to whom at least one of the following situations applies. He or she:

a) is the natural or adoptive parent (legal or in fact) of your child;

b) has been living and having a relationship with you for at least 12 continuous months, or

c) lived with you previously for at least 12 continuous months as your spouse or common-law partner.

Under proposed changes, the condition c) will no longer exist. The effect of this proposed change is that a person (other than situation a) above) will be your common-law partner only after your current relationship with that person has lasted at least 12 continuous months. This proposed change will apply to 2001 and later years.

Reference to "12 continuous months" in this definition includes any period that you were separated for less than 90 days because of a breakdown in the relationship.

Your spouse or common-law partner's net world income

If your spouse or common-law partner was a deemed resident in 2004, your spouse or common-law partner's net world income is the amount on line 236 of your spouse or common-law partner's return, or the amount that it would be if he or she filed a return.

If your spouse or common-law partner was a non-resident in 2004, your spouse or common-law partner's net world income is his or her income for 2004 from all sources both inside and outside Canada.

Enter this amount even if it is zero. We use this information to calculate the GST/HST credit and certain other credits.

Note
Even though you show this amount on your return, your spouse or common-law partner still may have to file a return for 2004. See the section "Do you have to file a return?" for more information.

Goods and services tax/harmonized sales tax (GST/HST) credit application

Deemed residents only - To receive this credit, you have to apply for it, even if you received it last year. Complete the application area on page 1 of your return for 2004. Your credit is based on your net income added to the net income of your spouse or common-law partner, if you have one, as well as the number of children you have. This information also is used to calculate any payments from certain related provincial programs. Net income is the amount on line 236 of a person's return, or the amount that it would be if the person filed a return.

Make sure you enter, in the Identification area on page 1 of your return, your marital status and, if it applies, the information concerning your spouse or common-law partner (including his or her net income, even if it is zero). Otherwise, your application may be delayed. Either you or your spouse or common-law partner can receive the credit, but not both. No matter which one of you applies, the credit will be the same.

If you apply for this credit, we will let you know in July 2005 how much you will receive, if any, and how we calculated it. Generally, we will make payments in July and October 2005, and January and April 2006.

Note
We may apply your credit against certain amounts you owe the Government of Canada or a province or territory. We list these amounts under line 484.

Are you eligible for the GST/HST credit?

You are eligible for this credit if, at the beginning of the month in which we make a payment, you are deemed resident of Canada and at least one of the following applies. You:

• are 19 years of age or older;
• have (or previously had) a spouse or common-law partner; or
• are (or previously were) a parent and live (or previously lived) with your child.

Note
If you will turn 19 before April 1, 2006, you can apply for this credit on your return for 2004. That way, you can receive it starting with the first payment after the month of your 19th birthday.

You are not eligible for this credit if, at the beginning of the month in which we make a payment, you:

• are a non-resident of Canada;
• are confined to a prison or a similar institution for a period of 90 days or more; or
• do not have to pay tax in Canada because you are an officer or servant of another country, such as a diplomat, or a family member or employee of such a person.

Note
You cannot receive the credit for your spouse or common-law partner or your child who, at the beginning of the month in which we make a payment, meets any of these conditions.

Receiving the credit for your children

We will base the GST/HST credit you receive for your children on Canada Child Tax Benefit (CCTB) information. If your children are not registered for the CCTB, call 1-800-387-1193 for more information. If you chose not to receive the CCTB, or you do not yet qualify, you still may be able to receive the GST/HST credit for your children. For details, call 1-800-959-1953.

Do you need to contact us?

Once you have applied for this credit, you have to advise us immediately of any of the following changes (as well as the date it happened or will happen):

• you move (otherwise, your payments may stop, whether you receive them by direct deposit or by cheque);
• your marital status changes (but if you separate due to a breakdown in your relationship, wait until you are separated for at least 90 days before submitting Form RC65, Marital Status Change );
• you have a child or a child starts to live with you;
• a child for whom you were receiving the credit is no longer in your care, stops living with you, becomes a spouse or common-law partner or a parent, or dies;
• you receive your payments by direct deposit and your banking information changes;
• you or your spouse or common-law partner become a resident of Canada; or
• you or your spouse or common-law partner is no longer resident in Canada.

For more information, get pamphlet RC4210, GST/HST Credit , or call 1-800-959-1953. If you are outside Canada, call the International Tax Services Office.

Information about your residency status

Check the box that best describes your residency status as of December 31, 2004. For more information on residency status, see the section "What are residential ties?"

Foreign income

If you were a deemed resident of Canada in 2004, you have to report your income you received in 2004 from all sources, both inside and outside Canada.

How do you report foreign income and other amounts?

If you were a deemed resident of Canada in 2004, report foreign income and other amounts (such as expenses and taxes paid) in Canadian dollars. Use the exchange rate that was in effect on the day you received the income or paid the expense. If the amount was paid at various times throughout the year, you can visit the Bank of Canada Web site at www.bankofcanada.ca, or contact us to get an average annual rate.

Tax Tip
If you were a deemed resident of Canada in 2004 and you paid foreign taxes on foreign income you received, do not reduce the amount you report by the amount of tax the foreign country withheld. However, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes (see lines 431 and 433).

Foreign property

If you were a deemed resident of Canada in 2004 there is a question for you to answer on page 2 of your return about owning or holding foreign property at any time in 2004. This refers to:

• foreign property you owned; and
• your share of foreign property in which you had an interest.

Check "Yes" if the total cost of all these properties was more than CAN$100,000 in 2004. Attach a completed copy of Form T1135, Foreign Income Verification Statement , to your return.

Note
Foreign property does not include:

• property in your registered retirement savings plan (RRSP), registered retirement income fund (RRIF), or registered pension plan (RPP);
• mutual funds registered in Canada that contain foreign investments;
• property you used or held exclusively in the course of carrying on your active business; or
• your personal-use property.

Form T1135 contains more information about filing and a complete list of the different kinds of foreign property.

Shares of a non-resident corporation

If you (either alone or with related persons) held 10% or more of the shares of a non-resident corporation, you may have to file an additional return. For more details, contact us.

Loans and transfers to non-resident trusts

In 2004 or a previous year, you may have loaned or transferred funds or property to a non-resident trust. If so, and you were a deemed resident of Canada, you may have to complete and file Form T1141, Information Return in Respect of Transfers or Loans to a Non-Resident Trust . For more information, get Form T1141.

Beneficiaries of non-resident trusts

In 2004, you may have received funds or property from, or been indebted to, a non-resident trust under which you were a beneficiary. If so, and you were a deemed resident of Canada, you may have to complete and file Form T1142, Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust . For more information, get Form T1142.

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