NR6 and Withholding

If you are a non-resident of Canada earning rental income from Canadian property, the Canada Revenue Agency (CRA) requires tax to be withheld every month at a rate of 25 percent on the gross rent. This can be extremely punitive, as it does not account for expenses like mortgage interest, property taxes, or maintenance costs.

The NR6 form allows non-residents to withhold tax on their net rental income instead of the gross amount. To file this form, CRA requires a Canadian-resident agent to sign an undertaking to ensure the income will be reported by filing a Section 216 election. By using this process, non-residents can reduce unnecessary tax while maintaining compliance with Canadian tax law.

Acting as a Canadian Agent

When a non-resident files an NR6, a Canadian agent must undertake significant responsibilities. The agent ensures the Section 216 election will be made, by filing a T1159 tax return. The agent may be held jointly and severally liable if this is not done properly, so they must withhold and remit monthly tax to their own non-resident account, and ensure the NR4 summary and slips are prepared. Because of these obligations and potential exposure, choosing a qualified Canadian agent is critical.

At Kirshen Tax Law, our Toronto tax lawyer acts as the Canadian agent for non-resident landlords. We handle the NR6 filing, manage the monthly withholding remittances, ensure all CRA deadlines are met, and retain an accountant to prepare the annual Section 216 election, T1159 return and NR4 slips. You deal with one point of contact, and we manage the entire process from start to finish.

Section 216 Election and Annual Compliance

After an NR6 is approved, the non-resident must file a Section 216 election, by filing a T1159 tax return each year to report rental income and expenses. This return determines the taxpayer’s final Canadian tax liability. If it is not filed, the CRA may assess tax on the basis of 25 percent of the gross rental income, along with applicable penalties.

An NR4 summary and slips must also be filed annually to report the amounts paid to the non-resident. We supervise these filings to ensure complete compliance.

What We Handle for You

• Preparing and filing the NR6 application;
• Acting as your Canadian-resident agent;
• Withholding and remitting monthly tax;
• Retaining and supervising an accountant to prepare and file the Section 216 election, T1159 tax return, NR4 summary and NR4 slip;
• Advising on Canadian tax implications for non-resident landlords; and
• Managing all CRA correspondence and deadlines.

Why Work with Kirshen Tax Law?

As a Toronto tax lawyer experienced in non-resident tax and CRA compliance, we have advised numerous clients around the world on NR6 filings, NR4 slips and Section 216 elections. We understand the risks involved for both non-residents and their Canadian agents, and we provide tailored strategies to protect our clients while reducing unnecessary tax.

Whether you own one rental property in Canada or multiple real estate investments, Kirshen Tax Law offers clear, reliable representation in dealing with CRA.

Proven Results: NR6 Filings

We have acted as Canadian agent for non-residents across the world, successfully filing NR6 undertaking, remitting amounts, coordinating NR4 summaries and slip, Section 216 elections and T1159 tax returns that reduced tax exposure and ensured compliance. In many cases, this has meant the difference between paying tax on gross rents versus paying on the actual, much lower net income after expenses.

Book a Free Consultation

If you are a non-resident earning rental income from Canadian property, contact Kirshen Tax Law today. We will prepare and file your NR6, act as your Canadian agent, handle the monthly withholding remittances, and retain an accountant to complete your Section 216 election, T1159 tax return and NR4 filings. You remain fully compliant, minimize unnecessary tax, and avoid costly CRA penalties, all with one point of contact.

Book a free consultation with a Toronto tax lawyer today.