# non-resident filing questions



## user (Sep 21, 2009)

Non-resident filers are instructed to complete a Statement of World Income (5013-SA) to attach to their return:
http://www.cra-arc.gc.ca/E/pbg/tf/5013-sa/5013-sa-14e.pdf

Under "Income from Canadian sources" it lists:


> - Enter the amount from line 236 on your return.
> - Net interest and other investment income
> - Net rental income
> - Other Canadian-source income (specify)
> - Add lines 1 to 4.


But doesn't line 236 (net income) already include those items? Why are they being added together, isn't that double-counting? Or one might assume that "Net interest and other investment income", etc, would not be a part of line 236, but I thought all Canadian sourced income are reportable by non-residents.

Also, does anyone know where "Canadian source" is defined? I'm not sure whether certain stocks held in a Canadian brokerage would be considered Canadian source in this context. -- Update: CRA's guide says "Your income from sources outside Canada is reported only on your Schedule A." (http://www.cra-arc.gc.ca/E/pub/tg/t4058/t4058-e.html#P256_29078). If an income has already been reported in the T1, then it would not be something that is "reported only on Schedule A." As such, I take this to mean that income which appears elsewhere in the T1 does not have to be recorded under "Income from sources outside Canada" in this schedule.


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## user (Sep 21, 2009)

user said:


> But doesn't line 236 (net income) already include those items?


I read CRA's page and the following seems relevant:


> The most common types of Canadian income subject to Part XIII tax are:
> ...
> rental and royalty payments;
> pension payments;
> ...


http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html

So, because tax is already paid on income such as rental income, line 236 would not have included it. However, I'm not sure why interest is not included in line 236, as the same page says:


> Generally, the interest that you receive or that is credited to you is exempt from Canadian withholding tax if the payer is unrelated (arm's length) to you.


Since the filer has yet to pay tax on the interest, shouldn't net income have included interest income?


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## Numbersman61 (Jan 26, 2015)

*Additional info*

http://www.cra-arc.gc.ca/E/pub/tg/5013-g/5013g-14e.pdf
See top of page 6 "what income should you report?" In the section " were you a non-resident of Canada in 2014?"


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## Financialplannerdude (Apr 30, 2015)

Can I ask why you are filing a Canadian tax return? I assume it's because you own real estate, that's typically the reason a non resident would file a tax return


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## Robillard (Apr 11, 2009)

Hello user,

To my knowledge, if you are a non-resident and have income over a certain threshold and/or you meet the other reporting requirements, the CRA asks you to complete a statement of world income, even if some of that income is not taxable in Canada. I'm not sure why though. 

It is my understanding that Line 236 should only report world income if you are claiming Canadian tax residency. If you are not resident, then you would not report your non-Canadian source income.

I can't give a definitive explanation of what "Canadian source income" means, but it would generally include:
-Labour income from working in Canada
-Dividends paid out by Canadian corporations
-Distributions from Canadian mutual fund trusts
-Interest on Canada-issued bonds or from Canadian bank accounts
-Taxable income of a Canadian partnership/sole proprietorship or of a non-Canadian business with permanent establishment in Canada
-Rent earned from Canadian properties
-Royalties earned where the underlying IP is exploited in Canada (I think)
-Other payments, such as pension income

If you are non-resident in Canada, and your Canadian brokerage accounts are "non-resident accounts," your brokerage will apply withholding tax at source (for example on dividends, mutual fund distributions, and possibly bond interest) and you do not need to file a tax return unless you have some other source of Canadian income that would require you to file.

If you are non-resident in Canada, but you have a Canadian rental property, then your tenants are not withholding tax and remitting it to the Government of Canada on your behalf. As the landlord, you have a filing obligation to report this income and pay tax as appropriate.

On the issue of withholding tax on interest, it is my understanding that Canada does not apply withholding tax on bank account interest, assuming that you and the bank are at arm's length. I'm not exactly sure if it applies on bond interest though.


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## Numbersman61 (Jan 26, 2015)

As I indicated to the original poster, the guide (see link) on page 6 Indicates that only certain types of income are included in line 236. Income such as dividends and interest are included in schedule A. No double counting.


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