CRA finds that remuneration paid by a Canadian corporation to a non-resident (recently, resident) employee was not subject to withholding

CRA found that monthly remuneration paid by a resident Canadian corporation to its only employee (who ceased to be resident in a previous year) was not subject to income tax source deductions pursuant to the exemption in Reg. 104(2) given that neither of the exclusions in Regs. 104(4)(a) and (b) applied. Although Reg. 104(4)(a) was potentially engaged because of his previous Canadian residency, he was excluded from its application because such remuneration was subject to income tax in the foreign jurisdiction and related to employment duties performed outside Canada. The performance of the duties outside Canada also precluded the application of the Reg. 104(4)(b) exclusion.

However, an annual T4 slip was required.

Neal Armstrong. Summary of 13 March 2023 External T.I. 2022-0947251E5 under Reg. 104(2).