Directors' fees paid to non-residents of Canada

Directors' fees, including those paid to non-residents of Canada, are considered to be salaries and wages for purposes of the Income Tax Act and are subject to withholding tax at the graduated rates under section 102 of the Income Tax Regulations.

The Canada Revenue Agency does not permit the withholding on fees paid to a non-resident of Canada at the flat rate of 15% as per section 105 of the Regulations. These fees are subject to the graduated rates on the same basis as directors' fees paid to Canadian residents.

Directors' fees paid to a non-resident director are to be reported on a T4 slip, not a T4A or a T4A-NR slip.

For more information on withholding tax and the reporting requirements for non-resident directors' fees, contact the nearest tax services office or see the following publications:

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