PART 13 TAX - NON-RESIDENT WITHHOLDING TAX

Stop Losing Money to Excess Withholding on Canadian Income

Use the Part 13 return to claim the lowest treaty rate and prevent unnecessary payments

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What you need to know about Part 13 Tax

Reduce your withholding tax by up to 25%

For many non-residents, the standard 25% withholding tax is reduced to 15%, 10%, or even 0% depending on the country of residence and income type. Many non-residents do not realize they are entitled to lower rates until they review their withholding details with a tax professional.

File correctly and don’t overpay

Many non-residents overpay withholding tax simply because the CRA was not informed of the proper tax treaty rate. Filing accurately helps prevent overpayment and keeps CRA records in good standing.

Find out if Part 13 Tax applies to you and save big

Part 13 generally applies to income such as Canadian dividends, rental income paid without a Section 216 election, pension income, Old Age Security, CPP, RRIF withdrawals, annuities, royalty payments, and similar passive income.

Never pay more than you need to

Share information about your self-employment, freelance, or rental income, and every required tax form is added for you.

Whether you’re living in Canada or abroad, all available deductions are identified to help increase your tax savings.

Enjoy peace of mind knowing your return is accurate, compliant, and optimized for the highest possible refund.

Why choose C.A.T.S for your Part 13 Tax filing?

Maximum Refund Guarantee

We search for every eligible deduction and credit to maximize your return.

Specialists in Non-Resident Tax

We understand the complexities of cross-border income, residency changes, and foreign asset reporting.

Completely Done-For-You Process

Send us the required documents and let our team of tax professionals handle the rest.

Why Our Clients Love Us

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Frequently asked questions

  • Part 13 tax is a withholding tax that applies when non-residents earn passive income from Canada. This includes rental income, dividends, interest that does not qualify for exemption, royalties, trust income, pension payments, and other passive sources. The default withholding rate is 25 percent, but the rate can often be reduced through a tax treaty. Filing the proper Part 13 return allows non-residents to confirm the correct rate and claim refunds if too much tax was withheld.

  • A Part 13 return is required any year a non-resident receives Canadian-sourced passive income that was subject to withholding tax. Filing ensures the correct treaty rate is applied and prevents the CRA from assuming the standard 25 percent rate. A yearly filing also supports compliance, avoids reassessments, and helps non-residents recover any over-withheld amounts.

  • A Part 13 filing allows non-residents to claim treaty benefits that lower the withholding rate. Many countries have agreements with Canada that reduce the rate on income such as dividends, royalties, rental income, or pension payments. If the payer withheld too much, the filing process enables a refund for the difference.

  • Part 13 applies to passive income such as rental income from Canadian properties, dividends from Canadian corporations, royalty payments, trust distributions, certain interest payments, annuities, pension income, partnership passive income, and similar sources. These amounts are taxed at the source, which is why proper filing is crucial for non-residents.

  • Yes. Many non-residents overpay because payers withhold the full 25 percent by default. If the correct treaty rate is lower, a Part 13 return can recover the difference. Filing also corrects mistakes made by the payer and ensures future income is withheld at the proper rate.

  • If a Part 13 return is not filed, the CRA assumes the maximum withholding rate applies. This often results in permanent overpayment, lost refunds, and potential compliance issues. A missing return can also trigger delays or complications with future filings and payments.

  • No. Section 216 applies to non-residents who earn rental income from Canadian property and want to file a special return based on net income instead of gross withholding. Part 13 applies more broadly to passive Canadian-sourced income that is taxed through withholding. Some landlords may need both Part 13 and Section 216 filings depending on the structure of their rental income.

  • Refund timelines vary depending on CRA processing volumes and whether the forms were completed accurately. Filing early, submitting clear documentation, and reporting correct treaty rates typically results in a faster turnaround.

  • Essential documents include NR4 slips, proof of withholding, country of residency confirmation, identification documents, rental statements if applicable, and any relevant tax treaty evidence. Accurate documentation ensures compliance and improves the chances of receiving the correct refund.

  • Yes. Part 13 returns are designed specifically for non-residents who live outside Canada. As long as Canadian-sourced income is received, a filing can be completed remotely from anywhere in the world.

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