If you're a nonresident of Canada for income tax purposes and you earn income from a Canadian source, you'll usually need to pay Canadian income tax on that income.

The Canadian tax rules for this are found in Part XIII of the Income Tax Act. "Part XIII tax" and "nonresident tax" mean the same thing.

If you make certain payments to nonresidents, you'll need to give them an NR4 tax slip for all of the payments made during the year. This covers things like interest, dividends, and rental income, but not employment income or business income. There are over eighty different types of income that require an NR4 slip, listed on the back of the form.

What's the Part XIII tax rate?

Nonresidents usually pay 25% on Part XIII amounts (acting in a film or video production pays 23%). A lower rate may apply if the nonresident resides in a country that has a tax treaty with Canada. For more info, review the rate of tax to be withheld.

Can I elect to pay tax on net income?

Part XIII tax is calculated on the total amount a nonresident receives. For some types of income under Part XIII, nonresidents can choose to have their tax based on their net income (after allowable deductions). The most common type of election is the Section 216 election, which is primarily for rental property income.