Do we file Schedule 29 if we withheld nothing on the payment?
Yes. The schedule reports the payment, not the withholding. A Canadian corporation that pays interest, royalties, management fees, rent or service fees to a non-resident reports those payments, and the fact that nothing was withheld is a separate question. It is usually the harder one. Where no withholding was applied we want to know why before the schedule goes in: a treaty rate relied on, an exemption claimed, or simply an oversight nobody has looked at since. The schedule is often what makes the omission visible, so it is better to have the explanation settled at the same time as the filing than to assemble it after a letter arrives.
Does a management fee paid to our foreign parent belong on Schedule 29?
Usually yes. Management fees paid to a non-resident are one of the payment types the schedule is built to capture, and a payment to a parent company is still a payment to a non-resident. Two things tend to go wrong. The fee is booked to an intercompany account and settled by set-off rather than by transfer, so nobody treats it as a payment at all. Or it is described as a recharge of costs, and the description is taken to change its character. Neither removes the reporting. Work from what the payment is actually for, then report it on that basis.
We had a loss year with no tax payable. Is Schedule 29 still required?
Yes. The obligation follows the payments made during the year, not the corporation's tax position. A loss year with no balance owing removes nothing, and a dormant corporation that still paid a royalty or a management fee to a non-resident sits in exactly the same place as a profitable one. The practical risk with a loss year is that the file gets less attention, the schedule gets skipped, and the omission then sits in the record for as long as the return does. Prepare it on the same timetable as the rest of the return rather than treating it as optional detail.
What happens if Schedule 29 does not match the non-resident slips?
That is the follow-up we see most often. The schedule and the slips are two descriptions of the same payments, and where they disagree the question that arrives is about withholding: whether it was applied at the right rate, or at all. The disagreement is often innocent. Amounts entered gross in one place and net in the other, a payment recorded in the month it was accrued rather than paid, a credit note taken against the wrong year. It is still what starts the correspondence. Reconcile the two before filing, and keep the working that shows they agree.
Is rent paid to a non-resident landlord reported on Schedule 29?
Rent paid to a non-resident is one of the payment categories the schedule covers, so a Canadian corporation paying rent to a landlord who is not resident in Canada should expect to report it. The point that causes trouble is the amount. Where tax was withheld and the landlord was paid the balance, the figure that reaches the schedule has to be the gross rent rather than the sum that left the bank account, with the withholding shown separately. Booking the net figure is how a schedule ends up disagreeing with the slips for the same year, and that disagreement is what prompts the question about whether the right rate was applied.
Our T2 was filed without Schedule 29. How do we fix it?
The schedule is prepared for the year it belongs to and put in front of the CRA with the return it should have accompanied. Before that, reconcile it against the non-resident slips for the same year, because a correction that disagrees with the slips invites the query it was meant to close. Where the review shows withholding was short, deal with that at the same time rather than in a second round. Coming forward with the schedule, the reconciliation and an explanation is a materially different conversation from answering a letter about the same gap months later.
How would a foreign tax authority know I am resident there?
Mostly from information you or your bank already provided. Account-opening forms ask you to self-certify tax residence, and that certification is reported between authorities under the Common Reporting Standard or, for US accounts, under the FATCA framework. Beyond that: employer and payroll filings, property registries, immigration records and the tax filings of anyone who paid you. The realistic planning assumption is that the data arrives. See FATCA and information reporting.
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.
