Subsection 216(1) Late-filing Policy

If you are a non-resident of Canada, this policy may let you file a section 216 income tax return after the normal filing deadline.

This policy applies only to returns filed under subsection 216(1) income tax return of the Income Tax Act.

What this policy allows

Under this policy, we may accept a late filed subsection 216(1) return if you qualify.

This gives you one chance to correct problems with:

• Tax withheld under Part XIII.
• Filing requirements linked to rental income or timber royalties.

When we will not accept a late return

We will not accept a late section 216 return under this policy if:

• We already told you about your Part XIII responsibilities for rental income or timber royalties, or
• We already started action because you did not follow Part XIII rules, or
• You submitted Form NR6, and we approved it.

Important note about subsection 216(4)

In rare cases, we may approve more time to file a subsection 216(4) return.

This only happens when extraordinary circumstances exist, under subsection 220(3) of the Income Tax Act.

Why this policy exists

This policy lets eligible non residents come forward voluntarily to fix past errors.

• We will not charge penalties.
• We may still charge interest on:
  • Late or missing Part XIII amounts.
  • Any unpaid Part I tax.

Normal tax rules for rental income and timber royalties

As a non resident, you usually pay 25% tax on:

• Rental income from real property in Canada.
• Timber royalties earned in Canada.

This 25% tax is usually your final tax.

Choosing to file under section 216

Instead of paying tax on gross income, you can choose to pay tax on your net income by filing a section 216 return.

In most cases, tax on net income is lower than the tax withheld on gross income.

Filing deadlines for section 216 returns

You must file your section 216 return by:

• Two years after the end of the tax year, or
• Six months after the end of the tax year if:
  • You sent Form NR6, and
  • We approved it.

Forms and guides

• Income Tax Guide for Electing Under Section 216 (T4144)
• Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real Property or Receiving a Timber Royalty

Get help

For help with the subsection 216(1) Late-filing Policy, contact the Sudbury Tax Centre.