In Guide
NR4 Slip and NR4 Summary: Reporting to Canada Revenue Agency (CRA)
A property manager in Canada who is managing properties of non-resident owners need to provide NR4 Slips and submit NR4 Summary to the Canadian Revenue Agency (CRA) at the year end. The NR4 information return includes NR4 Slip and NR4 Summary.
A non-resident is subject to withholding tax on gross rental income in Canada. The withholding agent, i.e. the property manager is responsible for reconciling and providing an NR4 slip to the Non-Resident owner so you they file your taxes under section 216 of the Income Tax Act (ITA).
NR4 Summary is the summary of all NR4 slips provided by the agent to all the Non-Rresident owners by the last day of March of the following tax year. The NR4 slip must be followed by the withholding agent to report gross income and taxes withheld within the same time frame.
Thus NR4 will be issued by the Property Manager by March 31st of the following tax year. For instance, NR4 return for the year 2023 has to be issued by 31st March, 2024.
If you do not have a withholding agent, you do not have to file an NR4 slip. Instead, you have to request the CRA to issue an NR4 Proforma by writing a letter to them.
Understanding Withholding Tax
The taxation process for non-residents involves withholding tax on certain types of income. The NR4 Summary reflects the total amount of taxes withheld, giving a clear picture of the tax obligations associated with the received income. For rental income of a non-resident, the percentage of tax withholding is 25%. The property manager will deduct 25% each time a rental payment is received and pay to CRA by monthly or quarterly basis.
We wish to demonstrate a scenario for the overall tax withholding process:
Suppose Mrs. Jane is a Property Manager for Non-Resident landlords – Mr. Smith and Mrs. Lee.
In 2023, Mr. Smith had an overall rental income of CAD $2,000.00 per month. So, he has to pay 25% of the rental income, which is CAD $500.00 withholding tax to the CRA. Mrs. Jane collects the withholding tax amount and pays to CRA on behalf of Mr. Smith every month.
For Mrs. Lee with a rental income CAD $2,500.00, has to pay CAD $500.00 withholding tax to the CRA and Mrs. Jane, the property manager, pays to CRA on behalf of Mrs. Lee.
By March 31st, 2024, Mrs. Jane will submit NR4 Summary to the CRA which will show:
- Total number of NR4 slips: 2
- Total review: CAD $54,000.00 (for 12 months)
- Total withholding tax: CAD $13,500.00
Also, Mrs. Jane will issue NR4 slip to Mr. Smith and Mrs. Lee individually showing the total rental income and withholding tax for their rental property.
Always consult the latest CRA guidelines for the most accurate and up-to-date information.
NR4 Information Return Guidelines
The NR4 information return is due on or before the last day of March following the calendar year to which the information return applies, or in the case of an estate or trust, no later than 90 days after the end of the estate’s or trust’s tax year.
The threshold for mandatory electronic filing of income tax information returns for a calendar year has been lowered from 50 to 5 for information returns filed after December 31, 2023
What is an NR4 Summary of Amounts Paid or Credited to Non-Residents of Canada?
An NR4 Summary of Amounts Paid or Credited to Non-Residents of Canada is a CRA specified document, that property manager submits to CRA which combines all total of all revenue and withholding tax information of all NR4 slip issued to the non-resident owners in the tax year.
It is a comprehensive overview of income paid to non-residents in Canada. It serves as a consolidated statement, summarizing various types of income and the associated taxes withheld.
Understanding the NR4 Summary is vital for both payers and recipients, ensuring accurate reporting and compliance with Canadian tax regulations.
The NR4 Summary records the total amounts reported on NR4 slips and on Form NR601, Non-Resident Ownership Certificate – Withholding Tax, and Form NR602, Non-Resident Ownership Certificate – No Withholding Tax.
Significance for Non-Residents
Non-residents receiving income from Canadian sources must pay close attention to the NR4 Slip. This document outlines the taxes withheld on their income, affecting their overall tax liability. Ignoring or misunderstanding the NR4 Slip could lead to unintended consequences, including penalties for non-compliance.
Filling out the NR4 Summary of Amounts Paid or Credited to Non-Residents of Canada
Year-end or tax year-end
Enter the four digits of the calendar year to which the information return relates or the applicable tax year-end.
Line 1 - Non-resident account number
Enter the account number under which you remit your non-resident tax deductions to the CRA. This number has to match the account number shown on the remittance part of Form NR76, Non-Resident Tax Statement of Account.
Name and address of payer or agent
Enter the name and address of property manager. Your name has to match the one shown on the remittance part of Form NR76, Non-Resident Tax Statement of Account.
Line 88 - Total number of NR4 slips filed
Enter the total number of NR4 slip you are issuing to non-resident owners.
Lines 18 and 22 - Amounts reported on NR4 slips
Add the amounts in boxes 16 and 26 from all slips. Enter the total on line 18.
Add the amounts in boxes 17 and 27 from all slips. Enter the total on line 22.
Lines 26 and 28 - Amounts reported on forms NR601 or NR602
The gross income reported on forms NR601 and NR602 should be included. Line 26 should contain the total.
The amounts of non-resident taxes you declared on form NR601 should be added. Put the total in line 28.
Line 30 - Total
Add the amounts reported on lines 18 and 26. Enter the total on line 30.
Line 32 - Total non-resident tax withheld
Add the amounts reported on lines 22 and 28. Enter the total on line 32.
Line 82 - Minus: Total remittances for the year
Enter the total you remitted to your non-resident tax account for the applicable tax year.
Difference
Line 82 is subtracted from Line 32. Fill in the designated space with the difference. Enter “NIL” on line 86 if there is no difference between the total amount of non-resident tax withheld and the remittances for the year.
In general, if the difference is $2 or less, the CRA does not charge or reimburse.
Line 84 - Overpayment
Enter the difference on line 84 if the amount on line 82 exceeds the amount on line 32 (and you do not need to file a separate return for this account number). Attach or send a note indicating the reason for the overpayment and whether you want the CRA to transfer this amount to another account or another year, or refund the overpayment to you.
Direct deposit is available for refunds of non-resident tax. To register, send the CRA a completed Form NR304, Direct Deposit Request for Non-Resident Account Holders and NR7-R Refund Applicants. For more information, go to Direct Deposit.
Line 86 - Balance due
If the amount on line 32 is more than the amount on line 82, enter the difference on line 86. If you have a balance due, attach a payment to your NR4 Summary or send your payment for the balance owing separately. If you remit your payment late, any balance due may be assessed penalties and interest at the prescribed rate.
To help the CRA process your payment correctly, write your non-resident account number on it.
Lines 76 and 78 - Person to contact about this return
Enter the name and phone number of a person the CRA can contact for more information.
Certification
An authorized officer has to sign the NR4 Summary to confirm that the information is correct and complete.
Understanding NR4 Slips - Statement of Amounts Paid or Credited to Non-Residents of Canada
NR4 Slip – Statement of Amounts Paid or Credited to Non-Residents of Canada is a legal document given to the Non-Resident landlord that show the summary of total rental revenue and withholding tax of the immediate tax year.
Each slip provides a breakdown of the type of income, amount paid or credited, withholding tax rates, and relevant dates. It provides information about specific types of income earned by non-resident owners. Non-resident owners should carefully review this slip to ensure the correct amounts are reported to the Canada Revenue Agency (CRA) by their property manager.
When to Fill out the NR4 Statement of Amounts Paid or Credited to Non-Residents of Canada Slip
Property manager must complete an NR4 slip for each non-resident to whom you’ve paid or credited amounts outlined in Part XIII of the Income Tax Act (ITA). This applies even if the tax deduction is not mandatory. Refer to Appendix B below for a breakdown of income types. You can also learn more about NR4 Return and Appendix B in Guide T 4061.
Additionally, if, under Part I or Part XIII of the ITA, you have paid or credited amounts, you must fill out an NR4 slip. This obligation persists whether or not tax was withheld on these amounts.
Exemptions under the ITA or a bilateral tax treaty may excuse tax withholding, but completing an NR4 slip remains mandatory.
Here is a table to help you decide if you need to file an NR4 slip
based on the total gross income and the tax withheld
Filling out the NR4 Slip
Box 10 - Year
Enter the four digits of the calendar year in which you made the payment to the recipient. For estates and trusts, enter the four digits of the tax year-end in which they made the payment to the recipient.
Box 11 - Recipient Code
Enter the appropriate code from the following list:
- individual
- joint account
- corporation
- other (for example, association, trust, including fiduciary-trustee, nominee, estate, or partnership)
- government, government enterprise, or international organizations and agencies prescribed by regulation
Note: The prescribed international organizations and agencies are:
- Bank for International Settlements
- European Fund
- International Bank for Reconstruction and Development
- International Development Association
- International Finance Corporation
- International Monetary Fund
- European Bank for Reconstruction and Development
Box 12 - Country Code for Tax Purposes
From the list in Appendix A below, enter the three-letter code for the country in which the recipient is a resident for tax purposes. Only use the codes listed in Appendix A. You can also more information for NR4 Return and Appendix A in Guide T 4061.
Generally, the recipient’s country for tax and mailing purposes will be the same. However, if they are different, you must always enter the country of residency for tax purposes.
Payer or Remitter Identification Number
Enter the number your organization assigns to non-resident payees.
For example, if you are a financial institution, enter the number assigned to your client (such as an annuitant number or client number) in this box. If you do not use such a number, leave this area blank.
Box 13 - Foreign or Canadian Tax Identification Number
Enter the identification number assigned to the non-resident for tax purposes by their country of residence. If a non-resident does not give you an identification number, ask if a Canadian social insurance number (SIN) is available and enter the number here.
Note – If an identification number is not available, ask the non-resident if they have been assigned an individual tax number (ITN), a temporary tax number (TTN) or a Canadian payroll account number (15 characters) and enter it here. If no number is available, leave the area blank.
Box 14 or 24 - Income code
Enter the appropriate numeric income code from the list in Appendix B below. For example, enter income code “13” to identify a lump-sum payment from all rental income from all properties of a non-resident.
Use the proper two-digit code. For example, copyright royalties should be reported using “05” not “5”
Since January 1, 2009, Tax-Free Savings Account (TFSA) amounts paid during the exempt period to a non-resident beneficiary are subject to Part XIII tax to the extent they exceed the amounts designated by the trust.
The exempt period is from the date of death of the holder of a TFSA governed by a trust to the end of the year following the year of death or the date the trust ceases to exist, if earlier.
For more information, see RC4477, Tax Free Savings Account (TFSA) Guide for Issuers.
Box 15 or 25 - Currency code
All income and withholding tax should be reported in Canadian funds. Enter currency code CAD. If you cannot report the amounts in Canadian funds, enter the three-letter code of the currency for the amounts reported as gross income (box 16 or 26) and tax withheld (box 17 or 27). See Appendix D of Guide T4061 for a list of the currency codes.
Box 16 or 26 - Gross income
Enter in Canadian funds the gross income, for the income code, you paid or credited to non-residents of Canada if:
- the amount paid or credited, or deemed paid, or credited under Part I or Part XIII of the Income Tax Act is $50 or more; or
- any amount under Part XIII has been withheld.
Box 17 to 27 - Non-Resident Tax Withheld
Enter in Canadian funds the amount of non-resident tax you withheld. If you cannot convert foreign funds to Canadian currency, complete box 15 or 25 (Currency code), in order to clearly indicate on the NR4 slip the currency of the tax you withheld. This will help us and the non-resident.
Note – For box 16 or 26 – (Gross income), and box 17 or 27 – (Non-resident tax withheld), individuals and corporations report income based on the calendar year and estates and trusts report income based on the fiscal year end.
Box 18 or 28 - Exemption Code
Enter the exemption code that applies from the list in Appendix C below. You can also more information for NR4 Return and Appendix C in Guide T 4061.
This code gives the authority under the Income Tax Act or a bilateral tax treaty to exempt the amount from Part XIII withholding tax, or to apply a reduced withholding rate, as a result of certain elections.
If no tax is withheld, the correct exemption code must be included.
Non-Resident Recipient's Name and Address
If you are preparing the NR4 slip for an individual, enter their last name, followed by the first name and initial. Otherwise, enter the name of the corporation, organization, association, trust, or institution.
If it applies, enter the second recipient’s name (if this is not a joint account or there is only one recipient, leave this line blank).
Note – Do not enter the name of the secretary-treasurer or any other individual who has signing authority.
Enter the recipient’s full mailing address as follows:
- Lines 1 and 2 – Enter the street address, (civic number, street name, and post office box number or rural route number).
- Line 3 – For Canadian addresses, enter the city, two-letter provincial or territorial code (as found in Appendix E of Guide T4061), and the postal code.
For U.S. addresses enter the city, two-letter state, territory or possession code (as found in Appendix E), and the zip code.
For addresses outside Canada and the United States enter the postal code and then the city name.
- Line 4 – Enter the full country name (if Canada, leave blank but enter CAN in the country code box).
- Country code – Enter the three-letter country code from Appendix A below or from Guide T4061 that corresponds to the country you indicated on line 4. This country code is for mailing purposes only.
- Name and address of agent or payer
Enter your full name and address.
- Non-resident account number
Enter the account number under which you remit your non-resident tax deductions to us. This number has to match the account number shown on the remittance part of Form NR76, Non-Resident Tax – Statement of Account.
Tips for Filling out NR4 Statement of Amounts Paid or Credited to Non-Residents of Canada Slip
Follow the instructions below carefully. The Canada Revenue Agency (CRA) may have to return incorrectly filled-out NR4 slips to you for corrections.
- Ensure that the NR4 slips can be read easily. Type your information slips or have them printed by a machine to aid the CRA in processing your returns promptly and accurately.
- Never alter the box heads in any way.
- Every time a non-resident changes their country of residence for tax purposes during the year, separate NR4 slips must be prepared.
- When reporting gross income (box 16 or 26), use Canadian funds
- When reporting the tax withheld (box 17 or 27), use Canadian funds
- When reporting partially exempt income, use separate lines.
For instance, record the taxable income on one line with the withholding tax and the exempt income on another line with the appropriate exemption number indicated in box 18 or 28 if you are paying interest to a client and a portion of the gross income is exempt from Part XIII tax.
- Sequentially report income on line 1 before proceeding to report income on line 2.
Distributing the NR4 Statement of Amounts Paid or Credited to Non-Residents of Canada Slip
You must provide the recipients with their NR4 slips on or before the final day of March following the applicable calendar year. Deliver the copies to estates and trusts no later than ninety days after the end of the relevant tax year.
The CRA may impose a penalty on you if you don’t. In cases where NR4 slips are not given to recipients, there will be a $25 daily penalty, with a $100 minimum and a $2,500 maximum.
Print the two NR4 slips that you have to give to each recipient on one sheet.
Give each of your recipients their NR4 slip in one of the following ways:
- You may send one copy electronically (by email, for example) if you have the recipient’s written approval, either in paper or electronic format, to send the NR4 slip electronically,
- Two copies, mailed to the last known address of the recipient; or
Note: You might want to retain the copies in the recipient’s file if the NR4 slip copies are not deliverable. Never send a recipient’s NR4 slip copies to an address you know is incorrect if that is how you have them listed.
Keep a record of the attempts you made to obtain the proper address and the reason the copies were not distributed. Store this document in the recipient’s file together with the copies of the NR4 slips.
- Two copies, delivered in person.
Keep the information from the NR4 slips in your records.
Appendix A – Country Codes for the NR4 Slip
Enter the appropriate three-letter code in box 12 of the NR4 slip. Please note that these codes should also be used in the address portion of the NR4 slip.
Three-letter codes and related countries
Appendix B – Income codes for NR4 Slip
Enter the appropriate income code in box 14 or 24 of the NR4 slip. Use the correct two-digit code. For example, for copyright royalties, use code “05”, not “5.”
Pension and similar payments
Deferred profit sharing plans (DPSP)
Registered disability savings plan (RDSP)
First Home Savings Account (FHSA)
Tax-Free Savings Account (TFSA)
Pooled registered pension plan (PRPP)
Registered retirement income funds (RRIF)
Footnote 1
For information about RRIF-periodic and lump-sum payments to a non-resident, contact the Canada Revenue Agency at 1-855-284-5946 from anywhere in Canada or the United States or at 613-940-8499 from outside Canada and the United States
Registered retirement savings plans (RRSP)
Superannuation or pension benefits
Other Payments
Social security benefits
Footnote 2
Old Age Security benefits and net federal supplements are reported on an NR4 (OAS) slip.
Mutual fund investment distributions
Taxable Canadian property (TCP)
Assessable distributions
Interest and dividends
Interest
Dividends
Rents, royalties, and franchise payments
Miscellaneous payments
Appendix C – Exemption codes for NR4 Slip
Exemptions applicable to dividends only
Exemptions applicable to dividends only
Authorization to apply a reduced rate of withholding
Exemption codes to use when an authorization to apply a reduced rate of withholding was granted
Exemptions applicable to management or administration fees or charges
Exemptions for payments made to non-resident tax-exempt persons
Other exemptions
Appendix D – Currency Codes for NR4 Slips
Use the correct three-letter code in box 15 or 25 of the NR4 slips. The amounts entered for gross income and tax withheld are reported in the same currency as stated by the currency code. The CRA will only convert amounts reported in foreign currency to Canadian funds based on the average annual exchange rate published by the Bank of Canada.
Most frequently used currencies
Footnote 3
This currency is also used in other countries. For more information, refer to the International Organization for Standardization ISO 4217 codes called Codes for the representation of currencies.
Other currencies
Footnote 4
This currency is also used in other countries. For more information, refer to the International Organization for Standardization ISO 4217 codes called Codes for the representation of currencies.
Appendix E – Canadian province or territory or U.S. state, territory or possession codes
Use the following abbreviations when you enter the Canadian province or territory, or U.S. state, territory or possession on the slip and summary.