Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...
July 10—The Canadian government is considering new tax rules that would ease payroll withholding obligations for foreign employers that have nonresident employees working in the country on short-term projects.
Under Section 102 of Canada’s Income Tax Regulations, payments received by nonresident employees for work performed in the country are subject to the same withholding requirements that apply to Canadian-resident employees. Unlike other jurisdictions that set minimum thresholds foreign employees need to meet to be subject to withholding, however, Canada's requirement is triggered after the foreign employee works a single Canadian workday.
Provisions of Canada's 2015 federal budget would relieve foreign employers of some of these withholding obligations. Under the revised framework, foreign employers would not be required to withhold payroll taxes from nonresident employees who have not been present in Canada for 90 days or more in any 12-month period that includes the time of payment. Nonresident employees would be required to meet other conditions to be excluded from withholding, including being a resident of a treaty country and being exempt from Canadian income tax under a tax treaty.
To qualify for the exemption, employers would be required to be resident in a country with which Canada has a tax treaty, not carry on business in Canada through a permanent establishment in the country and be certified by the Minister of National Revenue.
Foreign employers should note that the changes, which are expected to take effect Jan. 1, 2016, would not apply to reporting requirements, only to withholding.
To contact the editor responsible for this story: Rick Vollmar at email@example.com
For more information on Canadian HR law and regulation, see the Canada primer.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)