In April 2011, the Canada Revenue Agency (CRA) released final versions of declaration forms that should be used by non-residents of Canada to provide the CRA and Canadian resident payers with information regarding their residency status and eligibility for treaty benefits. These new forms are important for both Canadian resident payers and non-resident payees, of interest, dividends, rents, royalties, management fees and other similar payments which are subject to Part XIII non-resident withholding tax in Canada and may be eligible for a reduced withholding tax rate under a treaty. The forms can also be used when requesting a refund of Part XIII withholding tax, obtaining a Regulation 105 withholding tax waiver, requesting a certificate of compliance or filing a Canadian tax return for a hybrid entity.
The new CRA declaration forms are listed below and can be viewed by clicking on the links.
NR301 – Declaration of Eligibility for Benefits under a Tax Treaty for a Non-Resident Taxpayer (i.e., Individual, Corporation or Trust)
NR302 – Declaration of Eligibility for Benefits under a Tax Treaty for a Partnership with Non-Resident Partners
NR303 – Declaration of Eligibility for Benefits under a Tax Treaty for a Hybrid Entity1
1 A hybrid entity is an entity that is considered “fiscally transparent” under the tax laws of a country that Canada has a tax treaty with and not “fiscally transparent” for Canadian tax purposes. For example, a U.S. limited liability company is generally treated as a partnership for U.S. tax purposes, but is treated by the CRA as a corporation for Canadian tax purposes.
The introduction of these forms resulted from the changes in the 2007 Fifth Protocol to the Canada-US Tax Treaty. The forms are similar to the US Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholdings.
You can access our Cross-Border Update for a complete discussion of the new declaration process by clicking here.
If you have any questions or would like further information on the declaration forms, please call or email your Smythe Ratcliffe service contact or any member of our Tax Group. Click here for our Contact Us Page.