Income tax information for non-resident corporations
Non-resident corporations must file their T2 return, schedules, and General Index of Financial Information in Canadian funds only. They are not eligible to file in a functional currency under section 261 of the Income Tax Act.
T2 Corporation Income Tax Return – Filing requirements
A non-resident corporation must file a T2 return with the Canada Revenue Agency (CRA) if the corporation carried on business in Canada or disposed of a taxable Canadian property (TCP) at any time in the tax year. This requirement applies even if any profit(s) or gain(s) realized are claimed by the corporation to be exempt from Canadian tax due to the provisions of a tax treaty.
To claim a treaty exemption, the corporation must complete Schedule 91, Information Concerning Claims for Treaty-Based Exemptions, and attach it to the T2 return.
Schedule 97, Additional Information on Non-Resident Corporations in Canada
Schedule 97 has been developed for all non-resident corporations that must file a tax return in Canada to identify the type of income they earned in Canada. If you are a non-resident corporation, complete Schedule 97, Additional Information on Non-Resident Corporations in Canada and attach it to your T2 return.
Schedule 20, Part XIV – Additional Tax on Non-Resident Corporations
Every corporation that is a non-resident and subject to Part XIV has to complete Schedule 20, Part XIV – Additional Tax on Non-Resident Corporations to calculate the Part XIV tax payable. See section 219 of the Income Tax Act for more information as well as interpretation bulletin IT-137R3, Additional Tax on Certain Corporations Carrying on Business in Canada, and its special release.
Dispositions of taxable Canadian property (certificates of compliance)
If the corporation disposes of TCP, the corporation must notify the CRA, and obtain a certificate of compliance.
For more information, see information circular IC72-17R6, Procedures Concerning the Disposition of Taxable Canadian Property by Non-Residents of Canada – Section 116.
Services rendered in Canada (withholding tax)
Any payment received for services provided in Canada is subject to a 15% tax withholding, which must be remitted to the CRA by the person making the payment. This withholding is a payment on account of the corporation's potential tax liability to Canada. To pay any balance owing or to obtain a refund of any overpaid amounts, the corporation must file a T2 return with the CRA.
Registration for a payroll deductions account
The corporation may need a payroll deduction account if, while carrying on business in Canada, it will be making any payment(s) to a non-resident sub-contractor or to a resident or non-resident employee.
For more information on non-resident sub-contractors and employees, see guide RC4445, T4A-NR – Payments to Non-Residents for Services Provided in Canada, and guide T4001, Employers' Guide – Payroll Deductions and Remittances.
Part XIII withholding tax
A non-resident corporation may have to pay tax on passive income it receives from Canada. As well, a non-resident corporation carrying on business in Canada may be required to withhold tax under Part XIII of the Income Tax Act if it pays or credits certain kinds of income to another non-resident.
For more information, see information circular IC77-16R4, Non-Resident Income Tax, paragraphs 10 and 11, and guide T4061, NR4 – Non-Resident Tax Withholding, Remitting, and Reporting.
Part XIII.1 Tax – Additional tax on authorized foreign banks
Every authorized foreign bank is subject to Part XIII.1 tax equal to 25% of its taxable interest expense for the year. Identify these calculations as Schedule 92, Part XIII.1 Tax – Additional Tax on Authorized Foreign Banks, since we do not print this schedule.
For more information, see section 218.2 of the Income Tax Act.
Registration for corporation income tax
When a corporation registers for the goods and services tax/harmonized sales tax, it will receive a business number (BN) from the CRA. The BN should be entered on the T2 return and on all correspondence with the CRA.
Where to get information, returns, guides, and technical references
Our publications, including forms, schedules, information circulars (ICs), interpretation bulletins (ITs), and folios, are available at CRA forms and publications.
How to reach us
If you have a question about a non-resident corporation account, go to International tax and non-resident enquiries.
Forms and Publications
- Guide RC4445, T4A-NR – Payments to Non-Residents for Services Provided in Canada
- Guide T4001, Employers' Guide – Payroll Deductions and Remittances
- Guide T4012, T2 Corporation – Income Tax Guide
- Guide T4061, NR4 – Non-Resident Tax Withholding, Remitting, and Reporting
- T2 Corporation Income Tax Return
- Schedule 20, Part XIV – Additional Tax on Non-Resident Corporations
- Schedule 91, Information Concerning Claims for Treaty-Based Exemptions
- Schedule 97, Additional Information on Non-Resident Corporations in Canada
- Interpretation Bulletin IT-137R3, Additional Tax on Certain Corporations Carrying on Business in Canada
- Information Circular IC72-17R6, Procedures Concerning the Disposition of Taxable Canadian Property by Non-Residents of Canada – Section 116
- Information Circular IC77-16R4, Non-Resident Income Tax
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