Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Dear Sir:
This is in reply to your letter of May 23. We apologize for the delay in replying.
Interest paid by a person resident in Canada to a non-resident person is subject to a Part XIII tax of 25%, pursuant to the Income Tax Act, unless reduced by a reciprocal tax agreement pursuant to Article VII of the Canada-Japan Income Tax Convention (1965), this 25% rate is reduced to 15% if the individual is a resident of Japan pursuant to Part (1)(d) of Article II of the 1965 Convention.
If an excessive amount has been withheld from interest paid to a non-resident, the non-resident may apply for a refund of such excess by mailing a form NR7-R to the Ottawa District Taxation Office, 360 Lisgar St, Ottawa, Ontario, R1A 0L9. Two copies of form NR7-R are enclosed for your use. This application is made pursuant to subsection 227(6) of the Income Tax Act and must be made within two years from the end of the taxation year in which the excess amount was withheld.
Canada-Japan Income Tax Convention (1986)
This Convention was signed on May 7, 1986 but has not yet been ratified. Once ratified, the above mentioned rate of 25% will be reduced to 10% (pursuant to Article II of the Convention) with respect to interest paid after the calendar year in which the Convention enters into force to a person who is considered to be a resident of Japan pursuant to Article 4 of the Convention. This Convention will enter into XXX
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© Her Majesty the Queen in Right of Canada, 1986
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© Sa Majesté la Reine du Chef du Canada, 1986
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