What does filing Form 24Q late actually cost us?
The charge attaches to the return and the delay rather than to the tax, so a quarter in which salary deductions were calculated correctly and paid over on time can still cost something once the return itself is late. The consequence that tends to matter more sits at the employee's end. Their Indian return is built from what the salary return reports, so a period with no return filed leaves them unable to complete their own filing, whatever their employer has actually deducted from them. If you are deciding what to deal with first, the periods with employees waiting come first.
Our expatriate staff cannot file because our returns are late — what now?
Bring the outstanding quarters up to date in order, oldest first, and tell the employees where they stand while you do it. An assignee's Indian filing depends on the employer's reporting, and expatriate pay is the hardest case to assemble, because the figures come from more than one payroll: local pay, home-country components, and whatever treaty position was taken. Filing a period with the local element only, to unblock somebody quickly, creates an understated record that then has to be revised, and the revision pulls the employee's filing back open. Assemble the period fully, then file it.
Can we file the quarters we can complete and leave the difficult ones?
It is tempting when one assignee's home-payroll figures are holding up a period, and it usually costs more than it saves. Salary reporting is cumulative across the year at the employee's end, so a quarter filed out of sequence on an incomplete picture tends to need revising once the missing figures arrive, and each revision reopens the employees in it. Where a single individual's data is the blockage, chase the data and file the period once. Where a whole period's records are missing, file the periods you can complete in order and set out in writing what remains outstanding and why.
How far back do we have to go with overdue salary returns?
Start from the last period you can show was filed and complete, and work forwards from there, not from the oldest year anybody remembers. In practice the boundary is set by the payroll records: the periods where payslips, remittance records and assignment dates are still obtainable are the periods you can file properly. Where those records have gone, the work becomes reconstruction from bank movements and employment contracts, which is slower. Establish what you actually hold before committing to a range, because the answer to how far back changes the size of the exercise considerably.
Will late salary returns affect our assignees' home-country filings too?
Often, because the evidence of Indian tax that a home revenue authority wants is generated by the Indian reporting. An assignee claiming credit at home for tax paid in India needs a record of what was deducted, and that record follows the employer's return. While the quarters are outstanding the individual has had the tax taken from their pay and has nothing official to show for it, so a credit claim abroad joins the same queue as their Indian filing. Payers underestimate this: the delay is domestic, and the consequences reach two tax systems.
We took over the payroll and found unfiled quarters — where do we start?
With an inventory rather than a return. List the periods, the employees in each, the payroll system each was run on, and what evidence of deduction and remittance exists for each period. Handovers are where these gaps come from, whether a change of provider, an assignee moving between payrolls or a finance team relocating, and the missing periods usually cluster around the change. Once you can see which periods are complete, which need data from elsewhere and which need reconstruction, the filing order follows. Doing it the other way round means discovering mid-quarter that a payroll you no longer have access to held the figures.
How are non-residents taxed on Canadian rental income?
By default the payer or agent withholds a flat rate on the gross rent and remits it, with no deduction for mortgage interest, taxes or repairs. Electing under section 216 lets you file on the net rental result instead, which for most properties recovers a substantial part of what was withheld; an NR6 undertaking filed before the year starts lets the withholding itself be computed on net rather than gross. See the section 216 return.
What is Part XIII withholding?
Canada's flat withholding on certain payments to non-residents — dividends, interest to related parties, rents, royalties, pension and annuity payments, management fees. The payer withholds and remits, and is liable if they do not, which is why they insist on documentation. A treaty can reduce the rate, but only where the recipient has given the payer the declaration establishing entitlement before payment. Where too much was withheld, a refund claim is the route, with its own time limit. See Part XIII withholding review.
