![]() ![]() Although most tax treaties between Canada and other countries provide for some relief from Canadian tax, Canada does not normally relinquish its right to withhold tax pursuant to the provisions of section 153 of the Income Tax Act and subsection 105(1) of the Income Tax Regulations.(Client departments should consult sections 32-34 of Income Tax Information Circular IC75-6R2.) Only the portion of the payment attributable to services performed in Canada will be subject to a withholding of 15 percent. When a contract provides for services to be performed in more than one country, including Canada, an allocation of the contract price is required.These amounts have to be reported on a T4A-NR information slip (see 41-42) as travel expenses, but are not to be included in gross income on this information slip. Such travel expenses are limited to those expenses incurred for transportation, accommodation, or meals. Reasonable travel expenses, in excess of the above amounts, supported by vouchers retained by the payer and either paid directly to third parties on behalf of a non-resident, or reimbursed to a non-resident will also not be subject to Regulation 105 withholding. Travel expenses reimbursed to the non-resident for meals to a maximum of CAN$45 a day per person and accommodation to a maximum of CAN$100 a day per person will not be subject to Regulation 105 withholding and will not require vouchers to be retained by the payer. The CRA provides an administrative exception from withholding for reasonable travel expenses. Withholding pursuant to subsection 105(1) of the Income Tax Regulations does not apply to travel expenses as detailed in the following:.Payments for duties of employment performed in Canada, made to non-resident individuals, are not subject to the 15 percent withholding, but are subject to tax deductions on a basis similar to that applicable to residents.Withholding of the 15 percent of the payment does not represent a definite tax, but rather a payment on account of the non-resident contractor's overall tax liability to Canada. A waiver or a reduction of the withholding may be obtainable as detailed in paragraph (e) below. The SACC Manual general conditions include a provision regarding the withholding of 15 percent from the payment. Client departments are responsible for: withholding 15 percent of any amounts payable, in lieu of taxes remittance of this amount to CRA and reporting the amounts paid, and withheld, to CRA. The Income Tax Act and the Income Tax Regulations require client departments, on whose behalf a contract for services rendered in Canada has been awarded by PWGSC to a non-resident contractor, to withhold 15 percent from the payment of fees, commissions or other amounts paid to non-resident individuals, partnerships or corporations, other than for services performed in the course of employment.Users of the SAP Ariba environment should adapt their activities accordingly.Ä«uyers are advised to consult the tools available on CanadaBuys for guidance and procedures on completing procurement transactions in the SAP Ariba environment. Attention! As the transition to CanadaBuys is ongoing, Supply Manual references to ABE are to be interpreted as a generic system reference only. ![]()
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