Tax memo: Payments to non-residents: CRA issues new treaty-based withholding forms
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The Canada Revenue Agency (CRA) recently issued final versions of three forms that non-residents must file in support of reducing withholding tax rates on payments from Canadians to reflect treaty benefits:
- NR301 – Individual, corporation, trust
- NR302 – Partnership
- NR 301 – Hybrid entity
Reflecting the CRA’s increased expectations for documentation, a notice on its website posted on May 5, 2011, outlines the planned updates to Information Circular 76-12, Applicable Rate of Part XIII Tax on Amounts Paid or Credited to Persons in Treaty Countries. The forms themselves and updated information on the CRA website provide additional guidance.
The new forms indicate that the CRA expects partnerships or hybrid entities to obtain more information and evidence from their members to support treaty entitlements in respect of business income and capital gains (Forms NR302 and NR303).
The revisions reflect several recommendations PwC made. Read our government submission.
