Canada withholds before you've earned a dollar of profit

Regulation 105 & 102 Waivers + Section 116 Clearance

If you're a US business invoicing for services performed in Canada, employing people across the border, or selling Canadian property, the CRA takes its cut up front - 15% on service fees, payroll withholding on wages, 25% on property. It's not your final tax, but it strangles cash flow. We secure the waivers and clearance certificates that keep your money in your account.

Get a Waiver How It Works
United States flagUnited States Canada flagCanada

Quick answer

How do I reduce Canadian withholding on cross-border service fees and property sales?

When a US business performs services in Canada, employs people across the border, or sells Canadian property, the CRA collects tax up front: Regulation 105 withholds 15% on fees for services rendered in Canada, Regulation 102 withholds on wages paid for work in Canada, and Section 116 withholds 25% on dispositions of taxable Canadian property. None of this is your final tax — it is a prepayment you reconcile on a Canadian return — but it can strangle cash flow for months. The remedy is to apply before the work or sale closes: a Regulation 105 or 102 treaty-based waiver can reduce or eliminate the service and payroll withholding where a treaty exemption applies, and a Section 116 certificate of compliance limits the property withholding to actual tax. We file the waiver applications and clearance certificates on time so your money stays in your account instead of waiting on a refund.

Three Withholding Regimes, One Cash-Flow Problem

15%

Regulation 105

Withheld on payments to a non-resident for services rendered in Canada - consulting, fractional CFO, and B2B work. A Reg 105 waiver, granted in advance under treaty, stops or reduces it.

Reg 102

Payroll withholding

Applies to employment income earned in Canada, including non-resident employees. A Reg 102 waiver relieves treaty-protected wages from unnecessary withholding.

25%

Section 116

Withheld on a non-resident's disposition of taxable Canadian property (50% for certain property) unless a clearance certificate limits it to tax on the actual gain.

What We Do

  • Apply for Regulation 105 waivers in advance so payers don't withhold on your service fees
  • Secure Regulation 102 waivers for non-resident employees working in Canada under treaty
  • Obtain Section 116 clearance certificates on dispositions of taxable Canadian property
  • File Canadian non-resident returns to recover amounts already over-withheld
  • Assess permanent-establishment risk so a Canadian engagement doesn't create a Canadian tax filing you didn't expect

Apply before the invoice, not after. A waiver granted in advance keeps the cash in your business. Once it's withheld, you're waiting on a return to get it back - so the time to call us is when the Canadian work is being scoped, not after payment.

Withholding FAQs

What is Regulation 105 withholding?
Any party paying a non-resident for services rendered in Canada must withhold 15% and remit it to the CRA. It applies to consulting, fractional CFO, and other B2B services performed in Canada by a non-resident, including a US LLC or corporation. It is an upfront withholding, not a final tax.
Can I avoid the 15%?
Often yes. With treaty relief you can apply for a Reg 105 waiver in advance so the payer doesn't withhold (or withholds less). If it already happened, you file a Canadian non-resident return to recover the excess under the treaty.
What is a Regulation 102 waiver?
Regulation 102 requires Canadian payroll withholding on employment income earned in Canada, including by non-resident employees. A Reg 102 waiver relieves treaty-protected wages from withholding, avoiding unnecessary deductions and a later refund claim.
What is a Section 116 clearance certificate?
When a non-resident disposes of taxable Canadian property, the buyer generally withholds 25% (50% for certain property) unless a Section 116 clearance certificate is obtained, which limits withholding to tax on the actual gain. We file for the certificate and prepare the related return.

Keep Your Cash on the Right Side of the Border

A call covers your Canadian engagement and whether a waiver can stop the withholding before it starts. No commitment.

[email protected] +1 (206) 209-8210