Canada's tax treaties generally allow Canada
to tax the income of non-residents derived from the duties
of employment or office exercised in Canada .
However, many of Canada's tax treaties, including those
with France, Italy, Japan, the Netherlands, Switzerland, and
the United Kingdom provide that a non-resident may not be
subject to Canadian tax on Canadian-source employment income
as long as
- The recipient is present in Canada in that calendar year
for a period or periods not exceeding, in total, 183 days,
and
- The remuneration is not deducted in computing the income
under the Act of an employer who is Canadian resident, or
of a fixed base or permanent establishment in Canada of
a non-resident.
A similar rule is found in Canada's tax treaty with the
United States, however with the further proviso that the amount
of employment income may not exceed $10,000 (CDN) in the relevant
calendar year.
In many cases, the application of such rules may provide
exemption from Canadian taxation of stock option benefits
realized by non-residents. |
The general treaty rules noted above are modified
in connection with entertainers (including musicians) or athletes.
In basic terms, Canada may tax the income from such activities
carried on in Canada, even if such income might otherwise
be exempt from Canadian tax under the general rule above.
However, for U.S. residents, this special rule in the U.S.
treaty will not come into play in any particular calendar
year, unless the gross receipts in that year (including expense
reimbursements) are more than $15,000 (CDN).
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