Non-resident employees residing in a treaty country attending conferences in Canada

Effective immediately, the Canada Revenue Agency (CRA) has adopted an administrative exception with respect to non-resident employers who send non-resident employees to Canada to attend a conference. For the purposes of this exception, a conference is a formal meeting attended by a minimum of 30 participants for professional purposes.

On an administrative basis, the employee will not be required to obtain a waiver of withholding tax and the employer will not require certification as a qualifying non-resident employer if all of the following conditions are met:

  • The employer will not otherwise be carrying on business in Canada;

  • The employee will only be present in Canada to participate at the conference and will spend 10 days or less in Canada, including days spent travelling;

  • The employee is a resident of a country that Canada has a tax treaty with;

  • The employee is not providing any services for which their employer is receiving a fee from another person; and

  • The employee is not:

    • soliciting business on behalf of their employer;

    • providing services to a parent, subsidiary, or partnership related to their employer;

    • marketing their employer’s services or products;

    • meeting with clients regarding their employer’s business.

If the conditions shown above are met, the CRA will not assess the employer for the related withholding tax, penalties, and interest for failing to deduct or remit withholdings. In addition, the employment income earned by the employee for the period spent at the conference will not have to be reported on a T4 slip unless tax was withheld by the employer or the employee will be providing services in Canada in addition to attending the conference.

In circumstances that the CRA considers abusive, the policy will not apply. For example, when an employee participates in numerous conferences in Canada during the year, the policy will not apply.

 

 

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