Canada: Relief from withholding tax on reimbursements to nonresident subcontractors extended to June 30, 2026

Regulation 105 administrative relief policy extended from September 30, 2024, to June 30, 2026

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September 5, 2025

The Canada Revenue Agency (CRA) recently extended its Regulation 105 administrative relief policy such that taxpayers who reimburse nonresidents for services rendered in Canada through subcontracting arrangements will not be required to remit 15% withholding tax (or related interest and penalties) until June 30, 2026 (from September 30, 2024).

KPMG observation

The CRA’s administrative relief extension is welcome news for many taxpayers, especially since a proposed new Regulation 105 waiver rule for eligible nonresidents was originally announced in the 2024 federal budget but has yet to be included in a bill and is not yet law.

Read a September 2025 report prepared by the KPMG member firm in Canada

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