The 15% withholding is not the final tax of the non-resident. The CRA considers the withholding to be a payment on account of the non-resident's potential tax liability in Canada. Generally, non-residents have to file a Canadian Income Tax and Benefit Return to calculate their tax liability or to get a refund of any excess withholding amounts.

If a non-resident can show that the withholding is more than their potential tax liability in Canada, either due to treaty protection or income and expenses, the CRA may waive or reduce the withholding.

Non-residents who want to ask for a waiver or reduction of the withholding have to send a waiver application to a tax services office. For more information on which tax services office to send the application, go to Where to send completed waiver and non-resident employer certification applications.

Non-residents working in the film industry should send their waiver application to one of the three tax services offices that provide specialized service to non-residents in that industry. For more information on which tax services office to send the application, go to Where to send completed waiver and non-resident employer certification applications.

Non-residents have to send their waiver application no later than 30 days before they begin the period of service, or 30 days before they receive the first payment for the related services.

The non-resident has to give you a letter from the CRA authorizing a waiver or reduction of the withholding amount. If you do not receive such a letter, you have to withhold the usual 15%.

For more information about the waiver or reduction of withholding tax, see the following publications:

• Information Circular IC75-6R2, Required Withholding From Amounts Paid to Non-Residents Providing Services in Canada
• Form R105, Regulation 105 Waiver Application
• Form 105-S, Regulation 105 Simplified Waiver Application for Non-resident Artists and Athletes Earning No More Than CAN $15,000

Related topics

• Guidelines for Treaty-Based Waivers Involving Regulation 105 Withholding