Question about non-resident contractor

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Question about non-resident contractor

Post by chronusfree68 »

A Canadian company is paying a U.S.-resident contractor who was in Canada for around 4 weeks to perform the work (and the contractor has no SIN or any other number with the CRA). Amount to be paid is around $20,000 or could be less. Is the following the correct way, or are there any U.S.-Canada treaty items that will supersede the understanding below?

- Issue T4A-NR and withhold 25% tax.

Furthermore, is there a minimum threshold (like T4 income of below $10,000) which the treaty makes it "exempt" in Canada?
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Re: Question about non-resident contractor

Post by GabrielledeCastella »

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Re: Question about non-resident contractor

Post by CharlesGuest »

Garage door repairs should be done by a professional to ensure proper repairs and prevent injury. Common garage door repairs include replacing broken springs, repairing opener mechanisms, and fixing dented or damaged panels.
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Re: Question about non-resident contractor

Post by nelsona »

While you will need to issue an NR4 regardless, there are withholding waivers available. Look for "Regulation 105" on CRA website. one would need the waiver in order to avoid withholding.

The treaty articles which would apply are Article VII (Business Profits) and Article V, which defines Permanent Establishment.

Generally non-resident contractors who are in Canada for less than 183 days in ANY 365 day period are exempt from tax (and withholding).
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