It may seem like a date far off in the distance but being prepared and filing on time is essential for avoiding hefty penalties. For most individuals, Section 216 Non-Resident Rental Returns for the 2018 tax year are due to the Canada Revenue Agency (CRA) by June 30th, 2019. The CRA has two 2018 tax filing deadlines for non-resident rental property owners – June 30th, 2019 and December 31st, 2020.
The first deadline of June 30th, 2019 is strictly imposed by the CRA for taxpayers who were approved to remit non-resident tax withholdings on their net rental income. If form NR6 was approved by the CRA for 2018, allowing you to remit non-resident tax at a rate of 25% of your estimated net income, then you must file the Section 216 return by June 30th, 2019. Failing to submit the Section 216 return by the June 30th deadline results in a hefty penalty of 25% of your gross rental income being issued to your ‘Canadian Agent’ – even if you late file by only one day.
If non-resident tax withholdings were remitted to the CRA as 25% of your gross rental income, the CRA allows up to 2 years from the end of the tax year in which you earned rental income to submit your final Section 216 tax return, for example: if you earned rental income in 2018 and remitted tax withholdings of 25% of gross rental income, then you have until December 2020 to file your 2018 Section 216 returns.
If you are left unsure as to whether an expense is deductible on your Section 216 return, you can simply include receipts for these expenses when uploading your documents to Trowbridge’s secure portal. Upon preparation of your return, we will review to determine if this expense is allowed as a deductible item on your Section 216 return. We can then include these expenses to help reduce your overall taxable income.
Following these guidelines and adhering to the tax filing deadlines that apply to your specific situation will ensure a seamless return process and will help you avoid unexpected penalties. If you need solutions to your more complex questions on Section 216 income tax returns, contact the Trowbridge team at firstname.lastname@example.org
Written for Trowbridge Professional Corporation.
Contact Trowbridge Professional Corporation at Info@trowbridge.ca or contact me directly at Ruby.Chouhan@trowbridge.ca
[Disclaimer: Please keep in mind that everyone’s specific situation is unique. Always seek the advice of a qualified tax advisor. Trowbridge has been providing tax expertise for over 15 years, on a global basis, and provides this article as general information, believed to be correct at the time of publishing. This information should not be used without consulting a tax specialist].