Paying a non-resident for work done in Canada — where does doing it myself start to cost money?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: withholding applies on gross fees for services rendered in Canada even where a treaty will ultimately exempt the income.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Do I have to withhold tax when I pay a foreign contractor working in Canada?
Where the services are performed in Canada, the payer withholds from the gross fee and remits it. The obligation sits with whoever makes the payment, not with the consultant, and it applies even when a treaty will ultimately exempt the income from Canadian tax. That surprises people: the treaty relief is real, but it is obtained afterwards through a Canadian filing, or in advance through a waiver, not by simply ignoring the withholding. Decide before the invoice is settled which of those two routes you are taking. Once payment has gone out in full, the remaining route is to pay the tax over yourself and try to recover it from the consultant.
My consultant is American and the treaty exempts them, so why withhold?
Because withholding is a collection mechanism, not a determination of liability. It applies to fees for services rendered in Canada, on the gross amount, regardless of whether the consultant will eventually be found to owe nothing under the treaty. The two questions are answered at different times: you answer the withholding question on the payment date, while the treaty question is answered later on the consultant's Canadian return, or earlier on an application for a waiver. If nothing is done in advance, the consultant gets the money back by filing here, which can mean a long wait for cash they have already earned on work they have already done.
How do I get a waiver before paying a non-resident's invoice?
A waiver is applied for in advance of the payment, on the basis that the treaty will exempt the income, and it relates to a particular payment or engagement rather than standing as a general exemption. Practically, that means the work has to be scoped before the invoice is settled: what was done, where it was done, how long the person was in the country, and which treaty article is relied on. Leave the application until the payment falls due and there is rarely time. The alternative is not a disaster. Withhold, remit, and let the consultant recover the tax by filing, at the cost of the use of the money in the meantime.
We already paid the full invoice without withholding, so what now?
The amount that should have been withheld is still owed, and it is owed by the payer. The consultant has been paid in full, so recovering it depends on the contract and on the relationship; commercially, the firm often absorbs it. The first step is to establish how much of the fee relates to work actually performed in Canada, because that is the base. The second is to fix the remittance and the reporting for the year rather than leave it to surface later. The third is to change the contract template, so that the next engagement of this kind states plainly which party bears the withholding.
Does withholding apply if the contractor was only here briefly?
Duration does not switch the withholding off. What matters is that the services were performed in Canada, so a short visit engages the same mechanism as a long engagement, applied to the fee for the Canadian work. Short visits are in fact where this goes wrong most often, because nobody involved thinks of a site visit as a Canadian engagement at all. Where a contract covers work in several countries, the part of the fee attributable to the Canadian portion has to be identified and supported by something contemporaneous, such as an itinerary, a statement of work or timesheets, rather than reconstructed at year end from memory.
Can the non-resident get the withheld Canadian tax back?
Yes, by filing a Canadian return for the year and claiming the treaty position on it. The withholding is taken on the gross fee, so where the treaty exempts the income, or where real expenses reduce the profit on the engagement, the tax withheld routinely exceeds the tax actually due, and the difference comes back on assessment. The practical cost is time, plus one more filing obligation in a country the consultant may never work in again. That is why the waiver route is worth the effort where the engagement is known about far enough in advance to apply for one.
I work remotely from another country for a company back home — who taxes me?
Usually the country you are physically in, because employment income is generally sourced where the work is done, with your residence country taxing it as well if you are resident there and giving credit. Three things follow: your employer may acquire withholding and social security obligations where you sit, a treaty tie-breaker may be needed if both countries call you resident, and a short trip that becomes a long stay can cross a residence threshold nobody was watching. See remote workers and digital nomads.
How does a non-resident file a tax return?
On the non-resident form for that country, reporting only the income that country may tax. In the US that is the 1040-NR; in Canada it is a T1 restricted to Canadian-source amounts, plus the elective returns under sections 216 and 217 where withholding on rent or pension income exceeded the real tax. The commonest error is filing the resident form by default and reporting worldwide income to a country with no right to it. See Form 1040-NR.
