Taxpayers reimbursing non-residents for services in Canada via subcontracting can defer the 15% withholding tax and related interest or penalties until 30 June 2026.
The Canada Revenue Agency (CRA) has extended its administrative relief policy for withholding tax, interest, and penalties under Regulation 105 on 13 August 2025.
Taxpayers making payments such as fees, commissions, or other amounts to non-residents for services provided in Canada are typically required to withhold 15% under Regulation 105. This requirement ensures the CRA can collect any income taxes owed by non-residents.
This extension allows taxpayers who reimburse non-residents for services rendered in Canada through subcontracting arrangements to defer the requirement to remit the 15% withholding tax, along with any associated interest and penalties, until 30 June 2026.
The previous date was 30 September 2024.
