Section 216 election – guidance from Canadian tax lawyers on rental income and non-resident tax.
Income Tax Act
- Gross rental income $10,000
- Allowable expenses $5000
- Net rental income $5000
Form NR6 – Withhold Tax Based on Net Income
- Due date of Form NR6
th
gross
net
- Rental property that a non-resident has previously claimed capital cost allowance (CCA) was disposed in that taxation year, and
- Recapture of CCA is included on the tax return of that taxation year.
Subsection 216(1) Late-Filing Policy
- It has already advised the non-resident of his responsibility under Part XIII of the Act with respect to rental income or timber royalties earned in Canada, or
- It has already initiated action because of the non-resident’s failure to comply with Part XIII, or
- The non-resident has submitted Form NR6 undertaking which was already approved by the CRA.
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