Determine if you should elect

You will benefit from electing to file a return under section 217 if the total tax payable on line 43500 of your return is less than the tax you would otherwise pay if you did not make this election.

When the Canada Revenue Agency (CRA) assesses your return, your election under section 217 will only be taken into account if it is beneficial to you.

On this page

• Calculate the tax you would have paid
• CRA determination of your election
• Reducing tax withheld

Calculate the tax you would have paid

Determine the tax you would have paid if you did not make a section 217 election:

• $A
  Non-resident tax required to be withheld from line 44300 of Schedule C, Electing under Section 217 of the Income Tax Act
• plus$B
  The tax payable on any of the following amounts:

  • Canadian-source employment and business income
  • Net Canadian partnership income if you are a limited or non-active partner
  • Taxable capital gains from disposing of taxable Canadian property that you need to include on your return
• equals
  Amount of tax you would have paid

To calculate the total tax payable on your section 217 return, refer to Calculate your tax payable.

CRA determination of your election

The CRA will only accept your section 217 election if your return is filed by the due date.

If the election is beneficial

If you file your section 217 return on time, the CRA will refund any tax withheld that is more than the amount you owe.

If the payer withheld less than the required amount of non‑resident tax on your eligible section 217 income, you may have a balance owing, even if the election is beneficial.

On line 43700 of your return, include the non-resident tax withheld on your eligible section 217 income. These amounts can be found on your information slips.

Make sure you:

• include on line 43700 of your return the non-resident tax withheld on your eligible section 217 income from your information slips
• attach a completed Schedule A, Schedule B and Schedule C to your return
• attach a copy of your information slips

Attach a completed Schedule A, Schedule B and Schedule C to your return. If you do not attach these schedules, the processing of your return, and any refund you may be entitled to, may be delayed. Also attach a copy of your information slips..

If the election is not beneficial

If the payer withheld more than the required amount of non-resident tax on your eligible section 217 income, you can ask for a refund of the difference by completing Form NR7-R, Application for Refund of Part XIII Tax Withheld.

If the payer withheld less than the required amount of non-resident tax because the CRA approved your Form NR5 (or for any other reason), you have to pay the difference between the required amount of non-resident tax and the amount withheld.

Reducing tax withheld

If you want to make a section 217 election on eligible income that you have not yet received, you can apply for a reduction to the non‑resident tax the payer would otherwise have to withhold.

To do this:

1. Complete Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld
2. Send it to the CRA for approval on or before October 1 or before the first payment is due

The CRA will use your completed Form NR5 to determine if a section 217 election will benefit you.

If the election is beneficial for you, the CRA will authorize your Canadian payer(s) to reduce the amount of non-resident tax withheld from your benefits during the approval period.

If the CRA approves your NR5 application

You must file a section 217 return for each year of the period covered by the approved Form NR5.

An approved Form NR5 is valid for 5 tax years. However, if your situation changes during this period, you may have to file a new Form NR5.

For more information, see Form NR5 – 5-year Administrative Policy.

If the CRA does not approve your NR5 application

If the CRA does not approve your NR5 application or you do not send an application for the year, you may still choose to file a section 217 return. This allows you to apply for a refund of all or part of the non-resident tax withheld on your eligible section 217 income.