Taxing Business Visitors

When an employee travels to Canada to work, there are both immigration considerations and obligations as well as tax considerations and obligations that need to be considered.

What is a Business Visitor?

Typically, foreign nationals require Work Permits before they can conduct any work in Canada. However, where a foreign national is entering Canada to perform international business activities they can sometimes avoid the often difficult task of obtaining a Work Permit and instead obtain a Business Visitor Visa.

In order to be eligible as a Business Visitor, foreign nationals generally need to:

  • Limit their activities in Canada to tasks that are international in scope such as negotiating contracts, participating in meetings, site visits, training and after-sales servicing of equipment purchased from outside Canada; and
  • Prove that their remuneration and main place of work is outside of Canada.

Business Visitors are not individuals who:

  • Actively engage in hands-on production of goods or performance of services;
  • Actively manage over operations; or
  • Make sales to the general public.

Tax – Non-Resident Employees

Section 153(1) of the Income Tax Act requires all employers (foreign and Canadian) to withhold taxes and payroll deductions (CPP and EI) for all resident and non-resident employees who perform any services in Canada. Section 153(1) will apply to Business Visitors if they are considered to have provided services in Canada, even when they are remunerated outside of Canada and regardless of how short their stay is.

Examples of activities the CRA considers to be providing services include:

  • Attending a Board meeting in Canada as a Director.
  • Providing consulting services.
  • Providing partnership services.

This list is non-exhaustive and is merely illustrative.

However, the CRA has explicitly said that no tax needs to be withheld if a non-resident employee or visitor is only entering Canada to attend a conference, provided the following conditions met:

  1. The conference is a formal meeting attended by at least 30 participants for professional purposes;
  2. The employer will not otherwise be carrying on business in Canada;
  3. The employee will only be present in Canada to participate at the conference and will spend 10 days or less in Canada, including days spent travelling;
  4. The employee is a resident of a country that Canada has a tax treaty with;
  5. The employee is not providing any services for which their employer is receiving a fee from another person; and
  6. The employee is not:
    • soliciting business on behalf of their employer;
    • providing services to a parent, subsidiary, or partnership related to their employer;
    • marketing their employer’s services or products; or
    • meeting with clients regarding their employer’s business.

If all of these conditions are met, then there is no income tax withholding required and no T4 will need to be filed by the employer. Unless there was other employment income earned by the employee in Canada, no CPP or EI deductions will be needed either. 

Whether a non-resident has provided or rendered services in Canada will ultimately be based on the specific facts and circumstances of the situation. Therefore, if a non-resident is entering Canada for work purposes and is not eligible for the conference exception above, then there is a risk he/she will be considered to be performing services in Canada by the CRA and subject to tax withholdings. If the services performed relate to employment, then he/she will be subject to both tax withholdings and deductions for CPP and EI.

Avoiding the Taxes and Withholdings

Where non-resident employees are performing services in Canada, they may be able to avoid some or all these withholdings and deductions in the following circumstances:

  1. There is a Social Security Agreement between Canada and the country where the employee normally resides that relieves the requirement for payroll deductions for CPP and EI. To apply, the employer submits a Certificate of Coverage form to the CRA on behalf of the non-resident employee.

  2. There is a Tax Treaty between Canada and the other countries where the employee is taxed that relieves the withholding requirement for income tax withholdings (note: you will need to check the specific treaty to determine if relief is available). When seeking treaty relief, there are two routes:
  • Non-resident Employee Certification Program: Both the non-resident employer and non-resident employee must meet certain criteria to qualify. It is up to the employer to apply for the certification and, once certified, the certification lasts for 2 years. Once the employer has been certified, then they must comply with certain conditions to maintain the certification. It should be noted that if the qualifying employee earns less than $10,000 Canadian taxable income, then no T4 Slip or Summary needs to be filed by the employer. Otherwise, a T4 Slip and Summary must be filed. This certification program does not apply to seconded or economic employees.

  • Regulation 102 Waiver: Generally, if the non-resident employee is a resident of a country where a tax treaty exists with Canada or is an employee at a Canadian Embassy, High Commission, Consulate or other Canadian government organization located outside Canada, then he/she may apply for a waiver. The waiver process is more cumbersome and lengthy than the Certification process, therefore it is generally preferable to apply for a Certification where possible. In this scenario, a T4 Slip and Summary must still be filed and issued by the employer and a Canadian tax return must be filed by the employee.

Tax Returns

Technically, pursuant to the legislation, all taxpayers (defined as “any person whether or not liable for tax”) are required to file a tax return. However, while employees who have earned income taxable in Canada must file a return, the CRA has indicated informally that employees who are exempt under a Tax Treaty are not expected to file a return.

Election to File

If a non-resident employee is unsure of their tax liabilities and does not want to inadvertently incur interest and penalties, then they may elect to file a return and pay taxes (and receive refund, if applicable).


In conclusion, all non-resident employees and Business Visitors entering Canada who perform services will be subject to tax withholdings and/or payroll deductions (CPP and EI) on their income unless they:

  • Attend a conference and meet the conditions described above (exempt from tax withholdings);
  • Obtain a Certificate of Coverage from the CRA, which relieves the requirement to deduct CPP and EI (note: the extent of relief, if any, depends on the specific Social Security Agreement between Canada and the other country);
  • Obtain Certification under the Non-resident Employee Certification Program, which relieves requirement to withhold taxes (note: the extent of relief, if any, depends on the specific Tax Treaty between Canada and the other country); or
  • Obtain a Regulation 102 Waiver, which relieves requirement to withhold taxes (note: the extent of relief, if any, depends on the specific Tax Treaty between Canada and the other country).

If you have further questions about how to navigate the complexities of travelling into Canada for work, we would be happy to assist you.