Regulation 105 waiver — do I need an adviser, or can I do it alone?
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: a waiver can be sought on a treaty basis or on an income-and-expense basis, and it must be applied for before the fee is paid.
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.
Why did my Canadian client hold back tax on my entire invoice?
Because the withholding on fees for services rendered in Canada is computed on the gross fee, not on your profit from the work. The payer is required to hold back and remit regardless of what your costs were, so a job with heavy travel, subcontractor or equipment costs can have tax withheld that exceeds the Canadian tax you will eventually owe by a multiple. Your client is not being difficult; they carry the liability if they get it wrong. The way to stop it at source is a waiver applied for before the fee is paid. If the money has already gone, the route is a Canadian return for the year, which recovers the excess but much later.
Can I still apply for a Regulation 105 waiver after I have been paid?
No. A waiver has to be in place before the fee is paid, because its whole function is to tell the payer to release the money without holding tax back. Once the payment has been made and the tax remitted, there is nothing left for a waiver to relieve. At that point the only route to the money is to file a Canadian return for the year, report the Canadian-source income, claim the expenses against it, and recover the difference between the tax withheld and the tax actually due. That works, but it is slower and it puts the cash out of reach for the rest of the filing cycle.
What is the difference between a treaty waiver and an income and expense waiver?
They rest on different arguments. A treaty waiver says the income is not taxable in Canada at all, because the relevant article of your treaty gives the taxing right elsewhere, so no withholding should be held back against a liability that will not arise. An income and expense waiver concedes that Canadian tax applies but shows, from the numbers for the engagement, that tax on the gross fee overstates what will actually be owed once real costs are taken into account, and asks for withholding on a reduced basis. The treaty route needs the article to fit your facts. The income and expense route needs a credible budget for the work.
Do I still have to file a Canadian return if a waiver was granted?
Treat the waiver and the return as separate questions. A waiver deals only with the money held back at source; it is not a ruling that you have no Canadian filing obligation. Whether a return is required turns on the character of the income and on the basis the waiver was granted. Where tax was withheld and no waiver was obtained, the return is the mechanism that recovers the excess, so it is not optional if you want the money. Where the withholding was relieved, the filing question should be settled deliberately at the start of the engagement rather than assumed from the waiver letter.
My subcontractor is a non-resident working in Canada, do I have to withhold?
If you are paying fees for services rendered in Canada to a non-resident, the obligation sits on you as payer. It applies to the gross amount and it does not wait for anyone to confirm that the recipient will owe Canadian tax. A subcontractor who says the treaty protects them is describing their own eventual liability, not your obligation at the moment of payment. What relieves you is a waiver obtained before you pay. The practical sequence is to identify the non-resident status at contracting rather than at invoice, so there is time for the application to be made.
Does a waiver mean I owe no Canadian tax on the engagement?
Not by itself. A waiver governs what is held back when the fee is paid. It does not determine the final tax position for the year, which is settled on a return or, on a treaty basis, on the article that gave the taxing right away. An income and expense waiver in particular assumes Canadian tax applies and simply reduces the amount collected up front so it sits closer to the real liability. Read a waiver as a cash-flow instrument first and a tax conclusion second, and settle the substantive position separately.
Is my foreign pension taxable?
Usually in at least one country, and which one depends on the treaty article covering pensions — some give the taxing right to the country paying it, others to where you live, and several treat government service pensions differently again. Withholding at source is common and often reducible by treaty, with an elective return recovering an over-deduction. See the pensions article.
What is Part XIII withholding tax in Canada?
Part XIII is the Canadian charge on certain amounts paid to non-residents — rent, dividends, interest, royalties, pensions and similar passive income. The payer withholds and remits it, and it is a flat charge on the gross payment rather than on profit, which is why a non-resident landlord can be withheld on far more than the net rental result. Treaties reduce the rate and elective returns recover the excess. See the section 216 return.
