CRA confirms that a local s. 216 agent can reduce withholding on rent remittances for interest expenses paid directly by the non-resident

CRA has clarified that some statements in Guide T4144 - respecting remittances of Part XIII withholding on rent collections where a s. 216(4) undertaking of the non-resident has been given - mean that once CRA has approved the NR6, it will allow the local agent to withhold and remit based on the non-resident's net rental income after deduction not only of expenses paid by the agent but also of allowable expenses (e.g., interest respecting the property’s financing) paid directly by the non-resident.

Neal Armstrong. Summary of 22 July 2014 T.I. 2014-0520701E5 under s. 216(4).