Issuing an NR4 (Statement of Amounts Paid or Credited to Non-Residents of Canada) involves several steps. Here’s a step-by-step guide:
Step 1: Determine If You Need to File an NR4
You must file an NR4 if you have paid or credited amounts to a non-resident of Canada that are subject to withholding tax (e.g., interest, dividends, royalties, rent, pensions, etc.).
- If the payment is taxable, you must deduct and remit non-resident withholding tax (typically 25%, unless reduced by a tax treaty).
Step 2: Gather Required Information
For each recipient, you need:
- Recipient’s Name & Address
- Recipient’s Country of Residence
- Amount Paid (in CAD or original currency)
- Gross Income and Tax Withheld
- NR4 Code (Type of income – check CRA’s NR4 code list)
- Your Business Number (BN)
Step 3: Complete the NR4 Form
Use Form NR4 – Statement of Amounts Paid or Credited to Non-Residents of Canada (CRA link).
The form has two copies:
- Copy 1: Submit to CRA
- Copy 2: Send to the recipient
Key fields:
- Box 10 & 11: Gross income (in CAD if possible)
- Box 12 & 13: Tax withheld (if any)
- Recipient’s country code (Box 14)
Step 4: Submit the NR4 to CRA
You can file NR4 either electronically or by paper.
1. Electronic Filing (Recommended)
- Web Forms:
- Login to My Business Account or Represent a Client
- Select File NR4 slips and enter the details manually.
- Internet File Transfer:
- If you have a large number of slips, prepare an XML file and upload it via CRA’s Internet File Transfer (XML format required).
- You may need a Web Access Code (WAC) (Request it online or call 1-800-959-5525).
2. Paper Filing (Only for 1-5 slips)
- Mail completed NR4 Summary and NR4 slips to CRA:
Canada Revenue Agency
Jonquière Tax Centre
2251 René-Lévesque Blvd
Jonquière QC G7S 5J2
Step 5: Provide NR4 Slips to Recipients
- Send a copy to each non-resident recipient by March 31.
- If sending by mail, ensure it’s postmarked before the deadline.
Step 6: Pay Withholding Tax (If Applicable)
- If you withheld tax, remit it using Form RC160 – Remittance Voucher or electronically through CRA’s My Payment system.
- Payment is due on the 15th of the following month after payment to the non-resident.
Deadlines & Penalties
- Deadline to File: March 31 of the following year.
- Late Filing Penalty: $100 to $7,500, depending on the number of slips.
- Failure to Withhold Tax Penalty: CRA may charge the unpaid tax + penalties + interest.
Final Notes
- If no tax is required to be withheld, you may still need to file an NR4 for reporting purposes.
- If the payment is covered under a tax treaty, a non-resident may need to provide a NR301, NR302, or NR303 form to claim reduced withholding rates.