This post is also available in: Français (French)
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
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.
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.
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.