6 worked Non-Resident Corporation T2 Return case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to non-resident corporation t2 return work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$49,000 Credit Claim Filed And Accepted Without Adjustment — Cross-Border Contractor, Mississauga
Client: A contractor working on both sides of the border · Where: Mississauga, Ontario · Engagement: 10 weeks, fixed fee
Claim value$49,000
AcceptedWithout adjustment
RepeatableAnnually
The situation — A contractor working on both sides of the border, Mississauga, Ontario
A contractor working on both sides of the border in Mississauga, Ontario assumed the credits did not apply to a business its size. Invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken meant they had applied all along.
What we did for A contractor working on both sides of the border, Mississauga, Ontario
We identified the qualifying activity and built the documentation to support it. Then we restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward.
The result — A contractor working on both sides of the border, Mississauga, Ontario
$49,000 recovered. Because the eligibility analysis is on file, the same claim can be repeated each year with a fraction of the effort.
Case Study 2 · Records and systems rebuilt
Books Rebuilt From Source, $19,500 In Unclaimed Input Tax Found — US Retirement Account Holder, Saskatoon
Client: A dual citizen with a US retirement account · Where: Saskatoon, Saskatchewan · Engagement: 6 weeks, fixed fee
Unclaimed tax found$19,500
Records rebuilt34 months
ProcessDocumented
The situation — A dual citizen with a US retirement account, Saskatoon, Saskatchewan
A dual citizen with a US retirement account in Saskatoon, Saskatchewan could not answer basic questions about its own numbers. US tax paid but no foreign tax credit claimed on the Canadian return sat between the bank statements and the ledger.
What we did for A dual citizen with a US retirement account, Saskatoon, Saskatchewan
We reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked. We then documented the process so the work does not depend on any one person remembering how it was done.
The result — A dual citizen with a US retirement account, Saskatoon, Saskatchewan
Records rebuilt and reconciled, $19,500 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 3 · Cross-border exposure resolved
$53,000 Of Excess Withholding Refunded On Election — US Pension Recipient, Victoria
Client: A Canadian resident receiving US pension income · Where: Victoria, British Columbia · Engagement: 4 weeks, fixed fee
Withholding refunded$53,000
ElectionFiled and accepted
Cross-border reportingConsistent
The situation — A Canadian resident receiving US pension income, Victoria, British Columbia
A Canadian resident receiving US pension income in Victoria, British Columbia was paying tax in two countries on one stream of income. Winters spent in the United States with the day count kept casually and no residency position documented anywhere had never been reviewed against the treaty.
What we did for A Canadian resident receiving US pension income, Victoria, British Columbia
We reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused. We also coordinated the timing so the credit claimed in Canada matched the tax actually paid abroad.
The result — A Canadian resident receiving US pension income, Victoria, British Columbia
$53,000 of excess withholding was refunded and the exposure closed. Both sides of the border now report consistently, which is what keeps the credit claimable.
Case Study 4 · Objection and relief
Desk-Review Assessment Of $14,500 Vacated — Canadian on US Payroll, Toronto
Client: A Canadian with a US employer · Where: Toronto, Ontario · Engagement: 9 weeks, fixed fee
Assessment vacated$14,500
Supporting recordsNow on file
AccountCleared
The situation — A Canadian with a US employer, Toronto, Ontario
A Canadian with a US employer in Toronto, Ontario was carrying $14,500 of penalties and interest. The charges arose from 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net. Much of that amount accumulated during a period the CRA itself had delayed.
What we did for A Canadian with a US employer, Toronto, Ontario
We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely. We framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A Canadian with a US employer, Toronto, Ontario
The assessment was vacated. $14,500 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 5 · CRA review defended
$82,000 Reassessment Reduced To Nil On Review — US Citizen in Canada, Hamilton
Client: A US citizen living in Canada · Where: Hamilton, Ontario · Engagement: 6 weeks, fixed fee
Reassessment reduced toNil
Tax protected$82,000
Prior filingsUndisturbed
The situation — A US citizen living in Canada, Hamilton, Ontario
A review notice arrived at a US citizen living in Canada in Hamilton, Ontario, covering non-resident corporation T2 return for two tax years. The auditor's working position was an adjustment of $82,000. It was driven by invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken.
What we did for A US citizen living in Canada, Hamilton, Ontario
Rather than negotiate, we rebuilt the record. We applied the treaty rate to the dividend withholding, filed the NR4 return, and remitted the shortfall before the CRA assessed the payer for it. We then submitted a point-by-point response that answered each proposed adjustment with the document behind it.
The result — A US citizen living in Canada, Hamilton, Ontario
The auditor accepted the documented position and closed the review without adjustment, protecting $82,000 and leaving the prior filings undisturbed.
Case Study 6 · Deadline rescue
$94,000 Late-Filing Penalty Cancelled On Relief Application — US LLC Shareholder, Regina
Client: A shareholder of a US LLC · Where: Regina, Saskatchewan · Engagement: 4 weeks, fixed fee
Penalty cancelled$94,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A shareholder of a US LLC, Regina, Saskatchewan
A shareholder of a US LLC in Regina, Saskatchewan had already missed one deadline and was about to miss a second. Behind it sat foreign accounts that had passed the $100,000 T1135 threshold three years earlier. A penalty of $94,000 was accruing.
What we did for A shareholder of a US LLC, Regina, Saskatchewan
We split the work into what had to happen before the deadline and what could follow it. Then we filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund.
The result — A shareholder of a US LLC, Regina, Saskatchewan
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $94,000 of the penalty already assessed on the earlier year.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
