--- title: "NR4 Slips and Part XIII Withholding on Non-Resident Payments" url: https://www.everstonecpa.com/blog/nr4-slips-non-resident-payments-canada description: "Part XIII withholding comes off before a non-resident is paid. Rates by payment type, why the treaty rate isn’t automatic, and NR4 deadlines. Check yours." type: guide updated: 2026-10-08 summary: "Part XIII tax is a withholding tax on certain amounts paid or credited to non-residents — interest, dividends, rents, royalties, pensions and management fees among them. The general rate is 25%, often reduced by treaty. An NR4 slip is required even where no tax was withheld." faq_count: 6 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Blog](https://www.everstonecpa.com/blog) NR4 slips: reporting rent, dividends, interest and royalties paid to non-residents Tax # NR4 slips: paying rent, dividends and interest to a non-resident By EverStone CPA · Updated August 2026 · 9 min read **Quick answer:** Part XIII tax is a withholding tax on certain amounts paid or credited to non-residents — interest, dividends, rents, royalties, pensions and management fees among them. The general rate is 25%, often reduced by treaty. An [NR4](https://www.everstonecpa.com/forms/nr4) slip is required even where no tax was withheld. The slip is required even where no tax was withheld. **Rather have a CPA handle this?** A CPA at EverStone replies with a straight answer and a fixed fee for your situation. [Get My Fixed Quote →](https://www.everstonecpa.com/book-online) ## Key takeaways - Part XIII tax applies to amounts including pensions, annuities, management fees, interest, dividends, rents, royalties and estate or trust income paid or credited to non-residents. - The general rate is 25%, reducible to a lower rate or an exemption under the Income Tax Act or a bilateral tax treaty. - The Canadian payer or withholding agent is responsible for withholding and remitting at the correct rate. - An NR4 slip is required for every non-resident paid or credited a Part XIII amount, even where no tax was withheld. - The NR4 information return and recipient slips are due on or before the last day of March following the calendar year. Regulation 105 covers services in Canada; Part XIII covers passive income leaving it: rent to an emigrated landlord, dividends to a shareholder abroad, interest to overseas family. Same obligations, often missed because they do not feel like payroll. ## What Part XIII tax covers Part XIII tax is a withholding tax imposed on certain amounts paid or credited to non-residents. The CRA lists pensions, annuities, management fees, interest, dividends, rents, royalties, estate or trust income, and payments for film or video acting services, when paid or credited to individuals (including trusts) or corporations that are not resident in Canada. Note the phrase *paid or credited*. An amount credited to a non-resident’s account, a dividend declared and recorded, interest accrued and applied — can trigger the obligation without cash moving. **Paying rent, dividends or interest outside Canada?** We work out the Part XIII withholding, remit it and file the NR4 slips and summary on time, at a fee quoted in writing. See [the NR4 deadline checker](https://www.everstonecpa.com/forms/nr4), or [get a fixed quote](https://www.everstonecpa.com/book-online). [Get My Fixed Quote](https://www.everstonecpa.com/book-online) ## Who has to withhold on a non-resident payment The obligation falls on the payer or withholding agent: a Canadian resident paying or crediting Part XIII amounts to a non-resident; agents such as banks or trust companies acting for a debtor; anyone receiving such amounts for a non-resident without withholding; and any other person, including a non-resident, who pays or credits them. ## The rate, and why the treaty answer is not automatic Part XIII withholding rates Part XIII withholding, as set out on this page. A treaty rate is never automatic — it needs a declaration before anything other than 25% is applied. | Situation | Rate | | General Part XIII rate | 25% | | Payee in a non-treaty country | 25% | | Payee in a country whose treaty is not yet in effect | 25% | | Acting services rendered in Canada by a non-resident actor | 23% of the gross amount | | Reduced by treaty or the Income Tax Act | Lower rate, or exemption | | Penalty for failing to deduct | 10% of the required amount, plus interest on late remittances | Non-residents pay 25% tax on amounts taxable under Part XIII, reducible or eliminable under the *Income Tax Act* or a bilateral tax treaty, and the CRA holds **you**, the payer or withholding agent, responsible for the right rate. The 25% applies in non-treaty countries and where a treaty is not yet in effect. Non-resident actors performing in Canada face 23% on gross amounts. **A foreign address is not evidence of a treaty rate.** The CRA notes the payee’s name and address may no longer be the only information needed. To apply a reduced rate you should have recent information showing the payee is the beneficial owner, is resident in a treaty country, and is eligible for treaty benefits on the income being paid, which is what Forms NR301, NR302 and NR303 are for. Not sure how this applies to you? Every corporation is different. Send an enquiry for a straight answer and a fixed quote. [Send an Enquiry →](https://www.everstonecpa.com/book-online) [See fixed fees](https://www.everstonecpa.com/pricing) ## The NR4 slip: required more often than people expect Complete an NR4 slip for every non-resident paid or credited Part XIII amounts, *even if you are not required to deduct any tax*, including where no tax was withheld or an exemption under the Act or a treaty applied. Work out your own date with the [NR4 deadline calculator](https://www.everstonecpa.com/forms/nr4#deadline-checker). The reporting threshold is low: report on an NR4 slip if gross income paid or credited in the year is $50 or more, and report anyway if less than $50 was paid but Part XIII tax was withheld. ## Deadlines File the NR4 return — slips plus NR4 Summary — and give recipients their slips by the last day of March after the calendar year. Estates and trusts have 90 days after their tax year-end. A weekend or CRA-recognized holiday moves the date to the next business day. That March deadline sits close to, but is not, the [T4, T4A and T5 slip deadlines](https://www.everstonecpa.com/blog/t4-t4a-t5-slip-filing-deadlines-canada) at the end of February. ## What it costs to get wrong The exposure is structural. Fail to deduct required Part XIII tax and, the CRA states, **you are liable for that amount even if you cannot recover it**. Add a possible penalty of 10% of the undeducted tax, plus interest on late remittances. That is the sentence to remember. Once the gross amount has been paid to a non-resident who is no longer in the country, the withholding that should have been deducted becomes the payer’s own cost. ## Where this catches small Canadian businesses - **Rent to an emigrated landlord.** A Canadian tenant or property manager paying rent on Canadian real property to an owner who has become a non-resident is squarely inside Part XIII. This is one of the most common surprises for [real estate investors](https://www.everstonecpa.com/accountant-for-real-estate-investors) and their agents. - **Dividends to a shareholder who left Canada.** A private company dividend does not stop being a Part XIII amount because the shareholder is family. The characterization of the dividend itself. See [eligible versus non-eligible dividends](https://www.everstonecpa.com/blog/eligible-vs-non-eligible-dividends-canada) — is a separate question from the withholding. - **Interest on shareholder or family loans from abroad.** Interest paid to a non-arm’s-length non-resident is a classic missed slip. - **Royalties and licence fees.** Software, content and trademark licence payments to foreign owners routinely fall in. Payments for *services* performed in Canada are a different regime with a different rate and a different slip. See [Regulation 105 withholding](https://www.everstonecpa.com/blog/non-resident-withholding-regulation-105). Businesses that pay non-residents for both should expect to run both. ## The bottom line Part XIII is easy to overlook: no payroll cycle, and a payee happy to be paid in full. Flag non-resident payees at the start, get a treaty declaration before using any rate below 25%, and calendar the March NR4 deadline with the February slips. Sources - [Canada Revenue Agency — T4061, NR4: Non-Resident Tax Withholding, Remitting, and Reporting](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4061/nr4-non-resident-tax-withholding-remitting-reporting.html) - [Canada Revenue Agency — Guide T4061 (publication page)](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4061.html) - [Canada Revenue Agency — Rendering services in Canada](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rendering-services-canada.html) General information for Canadian business owners, current as of July 2026. Not tax, legal or accounting advice, and no client relationship. Rules change, so please [speak with a CPA](https://www.everstonecpa.com/book-online) before acting. About this article **EverStone CPA** Prepared and reviewed by a CPA at EverStone CPA, serving businesses in BC, Alberta, Ontario and Manitoba. [About the firm →](https://www.everstonecpa.com/about) · [Send an enquiry →](https://www.everstonecpa.com/book-online) ### Keep reading [Regulation 105 withholding →](https://www.everstonecpa.com/blog/non-resident-withholding-regulation-105) [T4, T4A and T5 slip deadlines →](https://www.everstonecpa.com/blog/t4-t4a-t5-slip-filing-deadlines-canada) [Accounting & bookkeeping →](https://www.everstonecpa.com/accounting-services) [When a management fee is used instead of salary →](https://www.everstonecpa.com/salary-vs-management-fee)[NR4: Statement of Amounts Paid or Credited to Non-Residents of Canada →](https://www.everstonecpa.com/forms/nr4) FAQ ## Frequently asked questions **What payments are subject to Part XIII tax?** The CRA lists pensions, annuities, management fees, interest, dividends, rents, royalties, estate or trust income, and payments for film or video acting services, when paid or credited to individuals (including trusts) or corporations that are not resident in Canada. **What is the Part XIII withholding rate?** 25% on amounts taxable under Part XIII, reducible or exempt under the Income Tax Act or a bilateral tax treaty. The 25% applies in non-treaty countries and where a treaty is not yet in effect; non-resident actors pay 23% for acting services in Canada. **Do I need an NR4 slip if no tax was withheld?** Yes. The CRA states an NR4 slip must be filled out for every non-resident to whom Part XIII amounts were paid or credited, even where no tax was withheld or no withholding was required because of an exemption under the Act or a treaty. **Is there a minimum reporting amount?** When gross income paid or credited in the year is $50 or more. Below $50, report anyway if Part XIII tax was withheld. **When is the NR4 return due?** By the last day of March after the calendar year, with slips to recipients. Estates and trusts have 90 days after their tax year-end. **What happens if the payer does not withhold?** The CRA holds a payer who failed to deduct Part XIII tax liable for it even if unrecoverable, and may add a 10% penalty on the undeducted amount plus interest on late remittances. ## Paying rent, dividends or interest to someone outside Canada? Email us who you pay, where they live and roughly how much. A CPA replies by email within one business day with the withholding rate to use and a fixed fee. [Get My Fixed Quote](https://www.everstonecpa.com/book-online)[Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) ## Have a question about this? Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies within one business day. Need more? A 45-minute **Advice Call** is $225 plus GST, credited to your first invoice if you become a client within 60 days. Want us to take it on? [Send an enquiry](https://www.everstonecpa.com/book-online). [Ask a Free Question](https://www.everstonecpa.com/quick-question) [Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) Email info@everstonecpa.com ★★★★★ “…We switched to him last year for both our personal and small-business taxes — responsive, knowledgeable and quick.” Heather Powers · Google review **Run your own numbers with the free calculators:** [estimate your instalment payments](https://www.everstonecpa.com/tax-instalment-calculator) · [Salary vs dividends calculator](https://www.everstonecpa.com/salary-vs-dividends-calculator) · [when the T2 has to be filed](https://www.everstonecpa.com/t2-deadline-calculator) [← Regulation 105: paying a non-resident for work done in Canada](https://www.everstonecpa.com/blog/non-resident-withholding-regulation-105) [OAS clawback planning: why an owner-manager has more control than most retirees →](https://www.everstonecpa.com/blog/oas-clawback-planning-canada) --- Source: https://www.everstonecpa.com/blog/nr4-slips-non-resident-payments-canada Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online