Residents of all countries

A non-resident of Canada who receives pension or similar payments and intends to file an income tax and benefit return in Canada can apply to the CRA for a reduction in the non-resident tax that you have to withhold.

To do this, the non-resident must use Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to Be Withheld. When the request is processed, the CRA will send a letter to the non-resident and the payer(s) stating any payments to which a tax reduction applies. You may not apply a tax reduction unless you receive written authorization from the CRA. If you do receive an authorization, you must report the amounts paid or credited on an NR4 slip and use exemption code "J."

Residents of certain countries

Canada's tax treaties with the following countries include an exemption from withholding tax for certain pensions and similar payments received in the year from Canada:

• Algeria
• Azerbaijan
• Brazil
• Croatia
• Cyprus
• Ecuador
• Greece
• Ireland
• Italy
• the Philippines
• Poland
• Portugal (including Azores and Madeira)
• Romania
• Senegal
• Slovenia
• Türkiye

If a non-resident receives more than one pension or similar payment from Canada, the exemption can be applied only to a limited amount of the total payments that the non-resident receives. Each tax treaty specifies different types of pension and similar payments to which the exemption applies. Amounts over the limit, and payments that are not eligible for exemption, are taxable at the applicable rate. To determine the exempt amounts, the non-resident has to give the CRA an estimate of the total pension and similar payments the non-resident expects to receive from each of the payers.

The non-resident gives this information and requests the exemption by filing Form NR5, which has to be filed once every 5 years. When the request is processed, the CRA will send a letter to the non-resident and the payer(s) stating any payments to which the exemption applies. You may not apply the exemption until you receive written authorization from the CRA.

Forms and publications

• Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to Be Withheld