A non-resident corporation has to file a T2 return if, at any time in the year, one of the following situations applies:
- it carried on business in Canada
- it had a taxable capital gain
- it disposed of taxable Canadian property unless the disposition meets all the criteria listed below in the section “Dispositions of taxable Canadian property (certificates of compliance)” This requirement applies even if the corporation claims that any profits or gains realized are exempt from Canadian income tax due to the provisions of a tax treaty.
This requirement applies even if the corporation claims that any profits or gains realized are exempt from Canadian income tax due to the provisions of a tax treaty.
Business is defined in subsection 248(1) and the extended meaning of carrying on business (in Canada) is defined in section 253.
The references to taxable capital gain do not include any gain resulting from the disposition of shares that are listed on a designated stock exchange (other than taxable Canadian property). A non-resident corporation also has to file a T2 return in a number of situations, including:
- when it has filed Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property or Receiving a Timber Royalty, to pay Part I tax on the net amount of timber royalty income or rental income from real property under subsection 216(4) for the current year and we approved it; or
- when it has filed Form T1288, Application by a Non-Resident of Canada (Corporation) for a Reduction in the Amount of Non-Resident Tax Required to Be Withheld on Income Earned from Acting in a Film or Video Production, to pay Part I tax on the net amount of acting services under subsection 216.1(1) for the current year and we approved it.
Even if neither of these requirements applies, a non-resident corporation may still want to file a return if any of the following situations apply:
- when it wants to claim a refund
- when it wants to elect to pay Part I tax on the net amount of timber royalty income or rental income from real property under subsection 216(1) for the current year
- when it wants to elect to pay Part I tax on the net amount of acting services under subsection 216.1(1) for the current year.
Non-resident corporations must file their T2 return, schedules, and the General Index of Financial Information in Canadian funds only.
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