Regulation 102 and 105 – Be aware and beware!

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Our firm has recently seen a major increase in Regulation 102 and Regulation 105 related inquiries and mandates.

Our experience is that the CRA is taking a hard line on implementing these regulations. Click here 

Services (Regulation 105)

Canadian companies are being checked for compliance with these complicated rules. The main issue is Canadian companies paying non-residents for services performed in Canada. Unless a waiver is obtained in advance, these Canadian corporations must withhold 15% when paying the non-resident. Quebec adds an additional 9% for services rendered in Quebec.

Salaries (Regulation 102)

Unless specific secondment or other arrangements are made, foreign corporations sending employees to work in Canada must ensure that these employees are paid through a Canadian payroll.

Non-resident Tax Refunds for Withholdings

In addition, US and other foreign companies are now required to provide more supplementary information to receive their treaty-based refund filings.

Contact us if you have any questions regarding what your Reg 102/105 requirements are, and how to make sure that you recoup the maximum withholdings possible.