Electing under section 216

As a non-resident of Canada, the non-resident tax withheld on the following types of Canadian-source income is usually your final tax obligation to Canada:

• Rental income from real or immovable property in Canada (rental income)
• Timber royalties on a timber resource property or timber limit in Canada (timber royalty income)

However, you can choose to file a separate Canadian tax return to report your rental income or timber royalty income. Choosing to send this return is called electing under section 216 of the Income Tax Act.

This election allows you to pay tax on your net rental income or timber royalty income instead of the gross amount.  This can reduce both the amount of non-resident tax that must be withheld during the year and the total amount of non-resident tax due for the year.

If you have questions, contact us about electing under section 216.