Compliance
Staying Compliant in 2026: Non-Resident Filing, UHT, and Business Updates You Must Know
Several shifts in remittance obligations and tax law—for **non-resident individuals**, the **elimination of the Underused Housing Tax**, and **corporate-credit changes**—mean businesses and foreign-based taxpayers must adjust practices come 2025 and 2026.
By NomadicTax Research Team • 5-8 min read • March 17, 2026
## Major Compliance Changes on the Horizon
- **Underused Housing Tax (UHT) eliminated**: This tax and associated filing requirements are **no longer applicable for tax year 2025 and onward**. However, filing obligations and penalties for **tax years 2022-2024** remain in force. If you’ve previously held underused property, make sure prior returns or filings are up to date. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/non-residents/5013-g/guide-non-residents-deemed-residents-canada-completing-your-return.html?utm_source=openai))
- **Non-resident filing & return due dates**: Updates in the CRA’s *2025 Income Tax and Benefit Guide for Non-Residents and Deemed Residents* include changes for electing under section 217 or 216.1, and more clarifications on withholding and reporting for non-residents. Pay attention to due dates and withholding obligations for services provided in Canada or income tied to Canadian sources. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/non-residents/5013-g/guide-non-residents-deemed-residents-canada-completing-your-return.html?utm_source=openai))
- **Scientific Research & Experimental Development (SR&ED) credit expansion**: The base or enhanced threshold has been increased (from $4.5M to $6M) for eligibility of enhanced 35% credit. Businesses doing research, development, or innovative tech work should evaluate eligibility and ensure eligible expenditures are tracked properly. ([canada.ca](https://www.canada.ca/en/department-finance/services/publications/federal-tax-expenditures/2026/part-2.html?utm_source=openai))
## Practical Steps for Businesses & Non-Residents
1. If you were under UHT obligations for 2022-2024, **finalize any missing filings or pay related penalties** to avoid escalated interest.
2. For non-resident service providers, consult whether your payments are subject to **Section 217** or **216.1** elections to reduce withholding. Keep detailed records of Canadian source income.
3. Researchers, tech firms, or inventors should monitor SR&ED eligibility carefully—ensure that your R&D work qualifies, that your documentation is thorough, and that you claim enhanced credits only where applicable.
4. Update your business accounting systems and software to handle new thresholds and credit limits, particularly if part of a CCPC (Canadian-controlled private corporation).
## Example Scenarios
- **International Consultant**: Maria lives in Spain but offers marketing services to a Canadian corporation. Under Section 217 election, she may submit a special “simplified” return and reduce withholding. If she misses deadlines or misclassifies income, Canada may withhold 25% or more by default.
- **Small Tech Startup**: XYZ Tech Inc. invests $5 million in R&D in fiscal 2025. Under the enhanced SR&ED credit, only $6 million of their expenditures will receive the full 35% enhanced rate. Planning those expenditures wisely can maximize the refundable or credit benefit.
## Summary
Even without sweeping reforms every week, these updates require attention to avoid unexpected liability or missed opportunities. If you are non-resident earning Canadian income, owning underused property, or investing in innovation, **update your compliance calendar now**. Reach out to tax professionals when in doubt, especially around sections such as SR&ED or non-resident tax election thresholds.