We filed the NR4 slips on time but the summary late, does that matter?
It matters less than the reverse, and more than most payers expect. The slips are what the payees need, so filing them on time protects the people the tax was withheld from. What the late summary leaves undone is the reconciliation between the slips issued and the tax actually remitted, which is the control the document exists to provide. In practice the delay is worth using: a summary prepared carefully rather than quickly is where a short remittance or a misposted payment surfaces, and it is better to find that yourself than to have it found for you.
Filing the summary late will show we under-remitted, should we still file?
Almost always, and the reason is that the liability already exists. The payer is liable for tax it should have withheld whether or not the reconciliation has been filed, so not filing does not reduce the exposure; it only postpones the point at which it is quantified, while interest runs on the unpaid amount. There are also disclosure routes that depend on coming forward before the CRA raises the matter, and they close once contact has been made. We normally quantify the shortfall first, then decide the filing route, then file. That order keeps the options open.
How does the late filing penalty on our return compare with the summary?
They are measured against different things. For the 2025 tax year the CRA's late-filing penalty on a return is 5 per cent of the balance owing plus 1 per cent of that balance for each full month the return is late, to a maximum of twelve months. Where the CRA has issued a demand to file and has already charged a late-filing penalty in any of the three preceding tax years, it is 10 per cent plus 2 per cent for each full month, to a maximum of twenty months. The penalty itself does not compound; interest on the unpaid balance compounds daily. That is a percentage of a balance owing, so a return with nothing owing carries nothing. The summary default is charged by reference to the form and the delay instead, which is why a fully remitted withholding year can still cost something when the reconciliation is late.
Can we file a late NR4 Summary for an account we already closed?
Yes, and an account that was closed with years unreconciled is one of the more common reasons this work reaches us. Closing an account stops future remittances; it does not discharge reporting for the years the account was open, and the payer's liability for tax it should have withheld survives the closure. The practical difficulty is evidential rather than procedural: the staff have gone, the software has been replaced, and the remittance confirmations are in a folder nobody can find. We rebuild the year from bank records and payee correspondence, and file on what can be supported.
Who pays the tax we should have withheld on payments made years ago?
The payer does. That is the single most important thing to understand before filing a late reconciliation, because it explains why the exercise is not administrative. The tax was the non-resident's, but the obligation to collect it sat with the party making the payment, and a payment made abroad years ago cannot realistically be reduced after the event. Whether the payee will make the payer whole is a matter of the contract between them, not of tax. We quantify the amount first, then look at the agreement to see who bears it.
Does interest keep running on an under-remittance found by a late summary?
Yes, and it is worth separating the two charges because they behave differently. Interest accrues on the unpaid balance and compounds daily, so it keeps growing while the reconciliation sits unfiled. The late-filing penalty does not compound. The consequence for sequencing is straightforward: paying the quantified shortfall stops the larger of the two meters even if the filing itself takes another few weeks to finalise. We normally agree the figure, arrange payment, and complete the filing afterwards rather than holding the payment until everything is signed.
What does Form W-8BEN actually do?
It tells a US payer that you are not a US person and, where you are entitled, claims the treaty rate on the income they are about to pay you — so withholding comes off at the reduced rate rather than the statutory one. It goes to the payer or the broker, never to the IRS, and it expires, so a stale form is a common cause of over-withholding. Getting it in before payment is the difference between a lower rate and a refund claim. See Form W-8BEN.
Do I pay tax twice on a foreign dividend?
Not at full rates if the relief is claimed. The paying country usually withholds at source, capped by treaty where one applies and the paperwork is in place; your residence country then taxes the dividend and credits the foreign withholding against its own charge. Where the withholding exceeded the treaty rate because no declaration was filed, the excess is recovered from the paying country, not credited at home. See the dividends article.
