Subsection 105(1)
Cases
FMC Technologies Co. v. Canada (National Revenue), 2008 DTC 6560, 2008 FC 871
The non-resident parent of the taxpayer ("FMCI") entered into a subcontract with the taxpayer for the performance of the in-Canada portion of its...
See Also
Beggs v. The Queen, 2016 TCC 11 (Informal Procedure)
Favreau J found that a refusal of CRA to issue a Reg. 105 waiver was not an “assessment” that could be objected to, or appealed to the Tax...
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| Tax Topics - Income Tax Act - Section 169 - Subsection 169(1) | refusal to grant Reg. 105 waiver not an assessment/remedy in Federal Court | 244 |
Stora Enso Beteiligungen GmbH v. The Queen, 2009 DTC 891, 2009 TCC 282
A German corporation ("SEPPA") engaged a Swedish consulting firm ("McKinsey") to do consulting work for a Canadian affiliate of SEPPA ("SEPH")....
Hamilton v. The Queen, 2007 DTC 121, 2006 TCC 603
In rejecting an argument of the taxpayer (who had been assessed vicariously under s. 227.1 in respect of the failure of a corporation of which he...
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| Tax Topics - Income Tax Act - Section 227.1 - Subsection 227.1(4) | 66 |
Weyerhaeuser Company Limited v. The Queen, 2007 TCC 65
In 1998 the Canadian taxpayer paid $14.3 million to non-resident service providers in the ordinary course of its forestry business. The Minister...
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| Tax Topics - Statutory Interpretation - Regulations/Statutory Delegation | narrow construction of Reg. so as to be intra vires | 212 |
| Tax Topics - Statutory Interpretation - Interpretation Act - Section 16 | "in respect of" in Regulation read narrowly to conform with "for" in statute | 169 |
Ogden Palladium Services (Canada) Inc. v. The Queen, 2001 DTC 345 (TCC), briefly aff'd 2002 DTC 7378, 2002 FCA 336
A corporation resident in the United States ("Marco") obtained a licence of stadium facilities from the taxpayers and contracted with them for the...
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| Tax Topics - Income Tax Act - Section 227 - Subsection 227(8) - Paragraph 227(8)(a) | due diligence defence not established in absence of evidence of professional advice | 273 |
Administrative Policy
3 December 2024 CTF Roundtable Q. 9, 2024-1038271C6 - Regulation 105
Regarding the situation where a Canadian taxpayer (CanCo) engages a non-resident (NRCo) to provide services to be rendered in Canada, with NRCo...
29 April 2024 External T.I. 2022-0943241E5 - Regulation 105
A US company (USco) invoiced its arm’s length Canadian customer (CanCustomer) for services rendered by it outside Canada and for services...
22 December 2023 External T.I. 2023-0986461E5 - Commissions Paid to a Canadian branch
Regarding the situation where LLC, which is a non-resident corporation filing Canadian corporate tax returns and claiming Treaty-based exemptions,...
29 November 2022 CTF Roundtable Q. 4, 2022-0950561C6 - Servers/Data Centres and Location of Services Rendered
Canco licensed software of a US affiliate (USco), which it used to provide data analytics services to its Canadian customers. The software and...
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| Tax Topics - Treaties - Income Tax Conventions - Article 5 | remote customer-support services from the US did not cause a Canadian services PE | 183 |
29 June 2022 External T.I. 2022-0923441E5 - Virtual medical services
S. 118.4(2)(a) indicates, respecting references in various provisions to listed types of health-care professionals, that “where the reference is...
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| Tax Topics - Income Tax Act - Section 118.4 - Subsection 118.4(2) - Paragraph 118.4(2)(a) | whether a virtual medical service is rendered at the location of the health professional or of the patient requires a review of the provincial licensing requirements | 200 |
16 October 2020 Internal T.I. 2019-0823641I7 - Regulation 105 - requirement to withhold
Canco entered into a contract (“Initial Contract”) with a non-resident corporation (“NR”) for the supply and installation of boilers in...
Guidance on international income tax issues raised by the COVID-19 crisis, CRA Webpage 31 March 2021
Relief where COVID-19 interruption in processing waiver of Reg. 105 withholding and treaty relief was available
[W]here a Waiver Request in...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) | 393 | |
| Tax Topics - Treaties - Income Tax Conventions - Article 5 | 390 | |
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(3) - Paragraph 2(3)(b) | 129 | |
| Tax Topics - Treaties - Income Tax Conventions - Article 15 | 679 | |
| Tax Topics - Income Tax Act - Section 153 - Subsection 153(1.1) | 239 | |
| Tax Topics - Income Tax Act - Section 116 - Subsection 116(1) | comfort letters issued during COVID-19 | 36 |
Guidelines for Treaty-Based Waivers Involving Regulation 105 Withholding, 6 November 2018
CRA overview of its guidelines for Treaty-based waivers of Re. 105 withholding
Waiver Guidelines (refer to attached Schedule A):
Treaty-based...
27 November 2017 External T.I. 2017-0731441E5 - Interchange Canada and Business Number
Under the proposed Interchange Agreement with a non-resident corporation (“NRCo”) and a non-resident employee of NRCo, the employee will...
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| Tax Topics - Income Tax Act - Section 150 - Subsection 150(1) - Paragraph 150(1)(a) | a non-resident corporation is carrying on business in Canada by virtue of being the legal employer of an employee seconded to Canada | 179 |
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(3) - Paragraph 2(3)(b) | NR corp carrying on business in Canada by virtue of being reimbursed for payroll costs of seconded employee | 141 |
| Tax Topics - Income Tax Regulations - Regulation 102 - Subsection 102(1) | NR company seconding employee to Canada subject to Reg. 102 withholding requirement but not EI or CPP | 173 |
30 March 2017 Internal T.I. 2016-0636721I7 - Consent fees and withholdings
Canco entered into a “Financial Services Agreement” with a non-resident Advisor who agreed to provide assistance respecting a proposed sale of...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(4) - Paragraph 212(4)(a) | consent fee was not for “advice or direction pertaining to the operation or administration of a company” | 161 |
| Tax Topics - Income Tax Act - Section 214 - Subsection 214(15) - Paragraph 214(15)(b) | whether consent fee was deemed to be interest under s. 212(15)(b) was moot | 126 |
9 September 2015 External T.I. 2014-0563611E5 F - Call Centre - Location of the services performed
A Canadian company outsourced some of its activities to a non-resident enterprise, so that the non-resident now operates a call centre which...
12 February 2014 External T.I. 2013-0505511E5 - Cancellation fees paid to a non-resident artist
A fee is paid to a U.S. musician for the cancellation of a scheduled Canadian performance. There may have been rehearsals in Canada. CRA...
18 May 2012 IFA Roundtable, 2012-0444101C6 - non-resident withholding - services
Respecting whether CRA requires every non-resident partner of a US partnership which has been subject to Reg. 105 withholding to file a Canadian...
28 November 2011 November CTF Roundtable, 2011-0426591C6 - Deemed services permanent establishment
A US partnership (USFirm) subcontracts part of its contract, to perform consulting services to an arm's length Canadian customer (Canco), to an...
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| Tax Topics - Income Tax Act - Section 150 - Subsection 150(1) - Paragraph 150(1)(a) | 214 | |
| Tax Topics - Treaties - Income Tax Conventions - Article 5 | subcontracting | 207 |
6 December 2011 External T.I. 2011-0405561E5 - Withholding on payment to non-resident
a Canadian town will pay a deposit to the non-resident agent for a non-resident artist who will perform in a stage production operated by the...
28 November 2010 CTF Roundtable Q. 9, 2010-0387091C6 - Late filing of T1 returns
Suppose a US-resident taxpayer provides services in Canada for 130 days between 1 October to 28 February, does not anticipate providing further...
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| Tax Topics - Treaties - Income Tax Conventions - Article 5 | 176 |
24 August 2010 External T.I. 2010-0354791E5 F - Commission d'un non-résident - 105(1) RIR
A Canadian real estate agent paid a portion of its commission generated on a sale of Canadian real estate (occurring between resident Canadians)...
7 December 1999 Income Tax Severed Letter 1999-0007810 - Application of subsection 17(2)
Although directors fees are salaries and wages for tax purposes and, therefore, are subject to Article XV of the Canada-U.S. Convention rather...
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| Tax Topics - Income Tax Regulations - Regulation 102 - Subsection 102(1) | 57 |
7 August 1998 Discussion Paper on Proposed Changes to Revenue Canada's Guidelines for Treaty-Based Waivers of Regulation 105 Withholding (Draft)
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| Tax Topics - Treaties - Income Tax Conventions - Article 5 | 0 |
22 March 1995 External T.I. 9504635 - WITHHOLDING TAX FOR NON-RESIDENT COMMUTERS (HAA 8019-1)
"If an individual comes to Canada and exercises his duties of employment for a Canadian company and the costs, whether directly or indirectly, are...
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| Tax Topics - Income Tax Act - Section 250 - Subsection 250(1) - Paragraph 250(1)(a) | 47 |
8 July 1991 T.I. (Tax Window, No. 5, p. 22, ¶1339)
Any GST payable on the fee paid to the non-resident is not subject to the withholding tax.
6 April 1990 T.I. (September 1990 Access Letter, ¶1441)
Where the service of a non-resident is the providing of information or advice by way of a telephone or electronic mail hotline and where the...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | 81 |
1990 Answers Given by Scarborough District Office (May 1990 Access Letter, ¶1200, Q. 6)
A Canadian corporation contracts for repair services to be received from the Canadian subsidiary of a U.S. corporation. The U.S. corporation sends...
12 November 1986 Press Release together with attachment entitled "Revised Administrative Policy - Non-Resident Withholding Taxes - Re: Services Rendered in Canada"
85 C.R. - Q.54
Where Regulation 105 and Article XVII of the 1980 U.S. Convention are both applicable, the payer is required to withhold 10% on the first $5,000...
81 C.R. - Q.48
RC will accept any reasonable apportionment as to the portion of a single payment that relates to services performed in Canada.
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| Tax Topics - Income Tax Act - Section 216 - Subsection 216(4) | Cdn lessee itself the agent | 37 |
IC75-6R2 "Required Withholding from Amounts Paid to Non-Resident Persons Performing Services in Canada"
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|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 102 - Subsection 102(1) | 0 | |
| Tax Topics - Treaties - Income Tax Conventions - Article 4 | 12 |
Finance
13 July 2001 Comfort Letter 20010713
After noting, with respect to s. 212(13.3) that "the payor's reasonable belief, or a presumption based on the payee's address, will suffice to...
| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(13.3) | 60 |
Articles
Joint Committee, "Section 105 of the Regulations to the Income Tax Act", 10 March 2025 Joint Committee Submission
The principal recommendations of the Joint Committee regarding the CRA administration of Reg. 105 were:
Withholding on subcontractor...
Raj Juneja, Pierre Bourgeois, "International Tax Issues That Get in the Way of Doing Business", 2019 Conference Report (Canadian Tax Foundation), 36:1 – 42
Withholding even where subcontracting by NR to Cdn subs
- A non-resident commonly contracts to provide services to a Canadian resident, and...
Sabrina Wong, Sania Ilahi, "Tax Implications of Asset Securitizations", 2015 CTF Annual Conference Report
Potential application to Canadian debtors under cross-border securitization (p. 12:26-12:27)
[W]hen trade receivables that arise from services...
Elaine Marchand, Florie Pellerin-Catellier, "Foreign Service Providers in Canada and Regulation 105", 21 Canadian Current Tax, Vol. 21, No. 2, November 2010, p. 21.
Jules Lewy, "Withholding Requirements for Non-Resident Service Providers in Canada", Tax Notes International, 7 June 2004, p. 1079.
Shannon Baker, Dale Meister, "Non-Residents Rendering Services In Canada: Regulation 105 and Other Issues", International Tax Planning, 1999 Canadian Tax Journal, Vol. 47, No. 5, p. 1321.
Albert Baker, Mark Briggs, "Revenue Canada Provides Increased Guidance on Waivers from Withholding under Regulation 105", International Tax Planning, Vol. VIII, No. 4, p. 596.
Murray, "Computer Software: Canadian Cross-Border Issues", 1993 Conference Report, C. 27
Discussion (at pp. 26-27) of Revenue Canada requirements in order to give a waiver of withholding tax.
Scheuermann, "Income and Commodity Tax Aspects of Acquiring and Exploiting Technology", 1991 Conference Report, c. 45.
Bacal, Lewin, "The Taxation in Canada of Non-resident Performing Artists and Behind-the-Camera Personnel", Canadian Tax Journal, November-December 1986, p. 1287
Includes discussion of changing RC position on whether expense reimbursements are included in the services referred to in Regulation 105(1).