If You Pay Non-Residents for Services in Canada, You May Have to File a T4A-NR
If you pay non-residents for services performed in Canada, other than in employment situations, you may be required to file a T4A-NR.
The T4A-NR slip is used to report all amounts you paid to non-resident individuals, partnerships, and corporations for services they performed in Canada that they did not perform in the course of an office or employment. Note if they provided services not included in this slip, you may still be required to file a T4 or T4A slip.
You will need to disclose the type of recipient (individual, corporation, other) along with their social insurance number (SIN) or individual tax number (ITN). An individual without a SIN can request a temporary tax number (TTN) from the CRA. The ITN is assigned when the non-resident individual applies for a waiver or reduction of withholding or previously filed a Canadian tax return.
Note in some instances, when you pay non-residents for services performed in Canada, a withholding is required to be made and remitted to the CRA. The slip will be used to verify the correct withholdings have been made.
The T4A-NR is due the last day of February following the calendar year to which the information return applies – unless this falls on a Saturday or Sunday or public holiday – it that is the case, the T5 is due the next business day. The penalties for late filings and failure to file start at $100 and increase to a maximum of $7,500. Additional interest may also apply.
If you pay non-residents for services, engage Shajani CPA to ensure proper disclosures are made, determine withholding requirements if any and complete timely filings.
This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2023 Shajani CPA.
Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning services.