At Lepore & Company, we assist businesses and individuals with understanding, managing, and minimizing withholding tax obligations, ensuring compliance with Canadian tax laws while maximizing tax efficiency.
Understanding Withholding Taxes in Canada
Withholding tax applies to various types of payments made to non-residents, including:
- Dividends
- Interest payments
- Royalties
- Rental income
- Employment income
- Pensions & retirement income
The standard withholding tax rate is 25%, but this may be reduced or eliminated under tax treaties between Canada and other countries[1][2][5].
Our Withholding Tax Services
1. Tax Treaty Optimization – Reducing Withholding Tax Rates
Many countries have tax treaties with Canada that reduce withholding tax rates on certain types of income.
Our tax treaty services include:
- Determining the correct tax treaty rate for your country
- Applying for reduced withholding tax at the source
- Ensuring proper documentation to avoid overpayment
We help minimize tax burdens by applying the most favorable tax treaty provisions.
2. Filing Non-Resident Withholding Tax Returns (NR4, NR6, Section 217, and Section 216 Elections)
Non-residents receiving Canadian-source income must comply with specific CRA withholding tax filing requirements.
Our filing services include:
- NR4 Slips & Summary for reporting non-resident income and withheld taxes
- NR6 Election to reduce withholding tax on rental income
- Section 217 Election for pension income to apply lower tax rates
- Section 216 Election for rental property owners to pay tax on net rather than gross income
Proper tax planning ensures you pay only the necessary taxes and recover overpayments.
3. Withholding Tax Compliance for Businesses & Employers
Canadian businesses making payments to non-resident individuals or companies must ensure proper withholding tax compliance.
Our compliance services include:
- Determining if withholding tax applies to payments
- Assisting in obtaining CRA approvals for reduced withholding tax rates
- Filing necessary reports (NR4, T4A-NR, and T5 slips) to CRA
By ensuring compliance, we help businesses avoid penalties and streamline cross-border transactions.
4. Refunds & Overpayment Recovery
If you have overpaid withholding taxes, you may be eligible for a refund.
Our refund services include:
- Filing tax returns to claim refunds
- Applying for tax exemptions where applicable
- Ensuring correct tax treaty rates are applied to avoid overpayment in the future
We work to recover excess taxes paid and prevent unnecessary tax deductions.
5. Clearance Certificates for Withholding Tax on Property Sales (Section 116 Compliance)
Non-residents selling real estate or taxable Canadian property must obtain a CRA Clearance Certificate before finalizing the sale.
Our clearance services include:
- Preparing and filing Section 116 requests to the CRA
- Calculating and paying applicable withholding taxes on capital gains
- Filing tax returns to claim a refund if overpaid
Without a Clearance Certificate, buyers must withhold up to 50% of the sale price, making compliance essential.
Why Choose Lepore & Company for Withholding Tax Services?
- Expert Handling of CRA Withholding Tax Rules
- Tax Treaty Optimization & Refund Assistance
- Specialized Support for Businesses & Non-Residents
- Hassle-Free CRA Filings & Documentation
At Lepore & Company, we provide expert solutions for withholding tax compliance, planning, and refunds, ensuring you or your business meet CRA requirements while reducing unnecessary tax burdens.
Need Help with Withholding Taxes? Contact Us Today!
Whether you are an individual, business, or investor dealing with cross-border transactions, we help you navigate the complexities of withholding taxes efficiently.
Contact us today!