What Is Form NR6?

The NR6 Form is a Canada Revenue Agency (CRA) document that a non-resident who has received a rent or timber royalty payment in Canada must submit to the agency to declare their intent to file an income tax return for that year. The NR6 is often used in conjunction with Form NR4, which is filled out by entities who have paid out money to non-residents in Canada.

Key Takeaways

  • Form NR6 is a Canadian tax form for non-residents receiving rental income or timber royalties.
  • The CRA defines a non-resident as an individual who resides in Canada for fewer than 183 days a year.
  • Taxpayers must file the NR6, which should correspond to the information on form NR4 that is reported by those paying the non-resident.

Understanding the NR6 Form

The NR6 Form is a required filing for non-residents of Canada who have received rent or timber royalty payments in Canada. The CRA publishes the form and handles all other federal taxation in Canada. The filer of an NR6 form is not expected to make a tax payment with the form. Rather, it is a declaration that they intend to file a tax return with any associated payments for that tax year. The CRA requires that an NR6 Form be filed on or before the first day of a tax year in which the non-resident expects to receive rent or royalty payments. An individual must file a T1159 Income Tax Return by June 30 of the following year. A corporation or trust is required to file a T2 Corporation Income Tax Return no more than six months after the completion of its tax year.

CRA requires that any non-resident of Canada receiving rent or timber royalty payments have a Canadian agent who collects the rent or royalty payments. Prior to the CRA approving the NR6 Form, the agent must withhold and make payment of the relevant non-resident tax by the 15th day of the month following the rent or royalty payment. Following NR6 approval, the non-resident is allowed to withhold taxes until the due date.

Non-Resident Taxpayer Status in Canada

The NR6 Form is intended for non-resident payers of Canadian income tax only. CRA defines a non-resident as any individual who routinely lives in a country outside of Canada or, more specifically, stays in Canada fewer than 183 days per year. Individuals who spent more than 183 days in Canada during a tax year but have no residential ties to the country as defined by the CRA may be determined to be deemed residents and thus subject to resident tax rates. This classification often applies to government employees stationed outside of Canada or those spending more than 183 days in Canada without residency in another country.

Tax obligations described on the NR6 Form fall under Part XIII of the Canadian tax code. Other forms of income under Part XIII include ordinary stock dividends, Canadian pension benefits and payments from Canadian retirement savings accounts. Non-resident taxpayers are typically subject to a flat 25-percent tax rate for rent and royalties unless a tax treaty between their native country and Canada provides relief from that rate.