Non-Resident Tax Services

Regulation 105 Withholding Refund, Recover Your 15%

Canadian clients are often required to withhold 15% on payments to non-residents for services in Canada. In most cases, this is not a final tax, it’s a prepayment we can help you recover.

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Written and reviewed by Sebastien Prost, CPA · Updated May 2026

15% withheld?
Services in Canada?
Non-resident?
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First, tell us about your company entity.

Our Process

How the Refund Process Works

Strict deadlines apply. We guide you through every step of the CRA filing process.

1

Eligibility Check

Free instant assessment.

2

Secure Upload

Encrypted portal transfer.

3

Analysis

Detailed treaty review.

4

Filing

T2 & Schedule 91 submission.

5

Refund

Refund issued by CRA.

6-month filing window

A corporate T2 return is generally due within six months of your fiscal year-end. File late and the refund can be delayed or denied.

3-year hard stop

The CRA generally will not issue a Regulation 105 refund once three years have passed from the end of the tax year. Miss it and the 15% is gone for good.

6 to 10 months to refund

Once filed, the CRA typically takes six to ten months to assess a treaty-based return and issue the refund cheque or deposit.

See the full timeline in our guide to Regulation 105 refund filing deadlines.

Documents Required for Tax Recovery

To file your T2 return and Schedules 91/97, we simply need the core documents proving your income and non-resident status. Our tax compliance team handles the entire filing process.

  • Withholding proof (NR4, T4A-NR, or Payer Letter)
  • Contract or Statement of Work
  • Invoices related to the Canadian work
  • Travel dates (flight tickets or calendar log)
  • CRA Business Number (if you have one)
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Stop It Before It Starts

Regulation 105 Waiver (Form R105)

Recovering the 15% after the fact means waiting months for a refund. A Regulation 105 waiver lets eligible non-residents reduce or eliminate the withholding before the Canadian payer cuts the cheque, so your cash stays in your business instead of sitting with the CRA.

Who qualifies

Non-residents protected by a tax treaty (no permanent establishment in Canada), or who can show the 15% far exceeds their actual Canadian tax. Treaty-based waivers are the most common path.

Apply 30 days ahead

Form R105 should reach the CRA at least 30 days before the services start or the first payment is made. Last-minute applications usually miss the window, leaving a refund claim as the only option.

Why use a CPA

The CRA expects the treaty article, the PE analysis, and an income estimate set out correctly. A weak waiver gets refused, and then the payer must withhold anyway. We prepare R105 waivers built to be approved.

Request a Waiver ReviewRead the R105 waiver guide

Technical Specifications & Common Pitfalls

VSReg 105 vs. Reg 102

Many businesses confuse the two. Regulation 105 applies to fees paid to a non-resident for services rendered in Canada.

Regulation 102 applies to salaries/wages paid to non-resident employees working in Canada. Each requires a different waiver (R105 vs R102) and a different T2 vs T4 filing process.

Treaty Returns & Article VII

Most refunds are claimed under Article VII (Business Profits) of the Canada-US Tax Treaty (or similar international treaties).

The argument is simple: without a "Permanent Establishment" (defined in Article V of the same treaty as a fixed place of business) in Canada, the profits are taxable only in your home country, meaning the 15% withheld in Canada must be returned.

Common Questions

Regulation 105 FAQ

What is Regulation 105 withholding?
Regulation 105 of the Canadian Income Tax Act requires payers to withhold 15% of gross payments made to non-residents for services rendered in Canada. The CRA's guidance is published in Information Circular IC75-6R2. This is a tax prepayment, not necessarily the final tax liability.
Why did my Canadian client withhold 15% from my invoice?
They are legally required to do so by the CRA if you are a non-resident performing services in Canada. If they fail to withhold, they can be held personally liable for the tax plus penalties, which is why many Canadian payers withhold even when a treaty would ultimately exempt you.
How do I apply for a Regulation 105 waiver?
You file Form R105 with the CRA, ideally at least 30 days before the services begin or the first payment is made. The waiver asks the CRA to reduce or remove the 15% up front, usually on the basis that a tax treaty protects your business profits because you have no permanent establishment in Canada. A well-supported treaty argument is what gets it approved. See our Regulation 105 waiver guide for the full process.
Is the 15% withholding a final tax or is it refundable?
It is a prepayment on your potential Canadian tax liability, not a final tax. If your actual Canadian tax is lower than the amount withheld (which it often is for treaty-protected non-residents), you can claim the difference back by filing a Canadian return.
Can I get a refund if I have no permanent establishment (PE) in Canada?
Yes. In fact, not having a PE is often the basis for claiming a full refund under a tax treaty. You generally still need to file a T2 return (a treaty-based Regulation 105 refund), often paired with form NR301 (Treaty Rate Declaration), to prove your status and request the funds back.
How long does a Regulation 105 refund take?
Plan for six to ten months from the date you file the T2 return to when the CRA issues the refund. Filing a complete, treaty-supported return the first time is the best way to avoid CRA queries that add months to the timeline.
What are Schedule 91 and Schedule 97?
Schedule 91 covers 'Information Concerning Claims for Treaty-Based Exemptions,' and Schedule 97 covers 'Additional Information on Non-Resident Corporations in Canada.' Both are filed with your T2 return to claim treaty benefits and recover the withholding.
What if services were performed in Québec?
Québec applies its own additional 9% withholding on services rendered in the province by non-residents, on top of the federal 15%. It is administered by Revenu Québec and requires a separate filing to recover. See our Québec withholding guide for details.
Is Regulation 105 the same as Box 105 on a T4A slip?
No, and the two are easy to confuse. Regulation 105 is the 15% withholding on fees paid to non-residents for services performed in Canada. Box 105 on a T4A slip reports scholarship, bursary, or research grant income for Canadian residents. If you are chasing a withholding refund on a service invoice, Regulation 105 is the one that applies to you.
Sebastien Prost, CPA, founder of LedgerLogic

Reviewed by

Sebastien Prost, CPA

Founder, LedgerLogic

Sebastien is a Canadian CPA who has guided US and international businesses through Regulation 105 refunds, R105 waivers, and treaty-based T2 filings. LedgerLogic handles the full process, from the permanent-establishment analysis to CRA correspondence, so non-residents recover the 15% without guessing at the paperwork.

Explore our non-resident tax services
Go Deeper

Related Regulation 105 Guides

Plain-English guides on every part of the non-resident withholding process, written by our CPA team.

Regulation 105 Waiver (R105)

How to stop the 15% withholding before you invoice.

Reg 105 Refunds for US Companies

Treaty basics and T2 filing under the Canada-US treaty.

Treaty-Based Returns (Sch 91 & 97)

The schedules that prove your treaty exemption to the CRA.

Regulation 105 vs Regulation 102

Contractor fees versus employee wages, and why it matters.

Québec 9% Withholding

The extra provincial withholding and how to recover it.

Filing Deadlines

The 6-month window and the 3-year hard stop on refunds.