What Part XIII Tax Covers
Part XIII of Canada’s Income Tax Act mandates withholding on payments to non-resident recipients for items like interest, dividends, rents, royalties, and payments for film or video acting services. For example, film actors not resident in Canada are subject to a 23% rate for services rendered here.(canada.ca)
New Digital Tools: NR Portal & My NR Account
CRA is rolling out the Non-Resident Withholding Tax portal, a digital service that enables non-resident account holders and their authorized representatives to manage tax obligations online. This includes:
- Viewing balances and recent transactions
- Filing NR4 information returns
- Managing authorized representatives and contact info
- Submitting documents digitally through My NR Account(canada.ca)
Implementation began around October 2025, with expected completion by May 2026 especially for document submission functionality.(canada.ca)
Tax-Treaty & Election Opportunities
- If income falls under a treaty country, withholding rates may drop—apply via Form NR5 or NR6.(canada.ca)
- For film and media income, non-residents can elect under section 216.1 to report on their 2025 Canadian film-acting income by filing the proper tax return—potentially getting refunds if withholding exceeded actual taxes.(canada.ca)
Key Takeaways If You’re a Digital Nomad or Non-Resident Worker
- Report income correctly: Any Canadian-source income often triggers withholding and reporting obligations for both payers and non-resident recipients.
- Don’t forget elections: For film/media income, you might elect to report taxes and potentially receive refunds. Be timely.
- Use the portal advantage: Accessing the NR portal streamlines remittance, reporting, and amendments.
- Understand deadlines: For 2025, NR4 slips & summaries generally due by last day of February 2026.(canada.ca)
Example Situation
A freelance digital nomad resident in another country contracts with a Canadian company for rights royalties. Under Part XIII, the payer must withhold the statutory rate (perhaps 25%, unless reduced by treaty). The non-resident can submit Form NR5 or NR6, or rely on My NR portal to manage these obligations; if a treaty applies, withholding rate may drop—for example, Canada-USA treaty reductions apply.
Final Thoughts
Understanding Part XIII and leveraging CRA’s new digital tools can cut administrative burden, reduce surprise withholding and help non-residents get accurate tax treatment. If you’re non-resident with income from Canada: stay proactive.