Regulation 105 Withholding and Waiver Case Studies
6 worked Regulation 105 Withholding and Waiver 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 regulation 105 withholding and waiver work, not a specific client's file.
Case Study 1 · Scaling without breaking
Second-Province Expansion Handled, $100,000 Of Cash Released — US Rental Owner, Windsor
Client: A Canadian resident with a US rental property · Where: Windsor, Ontario · Engagement: 11 weeks, fixed fee
Cash released$100,000
New registrationsComplete on day one
Compliance gapsNone
The situation — A Canadian resident with a US rental property, Windsor, Ontario
Revenue at a Canadian resident with a US rental property in Windsor, Ontario was up sharply and cash was tighter than ever. Underneath it sat foreign accounts that had passed the $100,000 T1135 threshold three years earlier.
What we did for A Canadian resident with a US rental property, Windsor, Ontario
We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely. Every new obligation — registration, remittance frequency, provincial filing — was set up before it was triggered, not after.
The result — A Canadian resident with a US rental property, Windsor, Ontario
$100,000 of cash was released from the working capital cycle, and the expansion completed with every registration and filing obligation covered from day one.
Case Study 2 · Structure rebuilt
Corporate Structure Rebuilt For $72,000 Of Annual Savings — Cross-Border Contractor, Red Deer
Client: A contractor working on both sides of the border · Where: Red Deer, Alberta · Engagement: 9 weeks, fixed fee
Saving per year$72,000
DocumentationComplete
Transfer basisRollover
The situation — A contractor working on both sides of the border, Red Deer, Alberta
The structure at a contractor working on both sides of the border in Red Deer, Alberta had been set up years earlier for a business that no longer existed, and dividends paid to a non-resident shareholder with nothing withheld, leaving the payer holding the liability had become expensive.
What we did for A contractor working on both sides of the border, Red Deer, Alberta
We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward. The reorganisation used the rollover provisions rather than a taxable transfer, so no tax fell due on the restructuring itself.
The result — A contractor working on both sides of the border, Red Deer, Alberta
$72,000 of annual saving, achieved on a tax-deferred basis. The minute book, elections and valuations are all in the file.
Case Study 3 · Planning that cut the bill
$25,000 Saved By Correcting What Prior Filings Had Missed — Inbound Assignee, Regina
Client: An inbound transferee on assignment · Where: Regina, Saskatchewan · Engagement: 3 weeks, fixed fee
Saving identified$25,000
RecurringYes
Positions documentedAll
The situation — An inbound transferee on assignment, Regina, Saskatchewan
An inbound transferee on assignment in Regina, Saskatchewan asked for a second opinion on regulation 105 withholding and waiver after three years of rising tax. The review found US tax paid but no foreign tax credit claimed on the Canadian return.
What we did for An inbound transferee on assignment, Regina, Saskatchewan
We built the comparison first — current structure against two alternatives — and then filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund.
The result — An inbound transferee on assignment, Regina, Saskatchewan
First-year saving of $25,000, with the same benefit recurring. Every position taken is documented and supported in the file.
Case Study 4 · Backlog brought current
$43,000 Of Arbitrary Assessments Vacated After 5 Years — US Retirement Account Holder, Burnaby
Client: A dual citizen with a US retirement account · Where: Burnaby, British Columbia · Engagement: 9 weeks, fixed fee
Arbitrary tax vacated$43,000
Years brought current5
Account statusCurrent
The situation — A dual citizen with a US retirement account, Burnaby, British Columbia
5 years of unfiled returns had turned into notional assessments at a dual citizen with a US retirement account in Burnaby, British Columbia, with 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net underneath. Collections had already started.
What we did for A dual citizen with a US retirement account, Burnaby, British Columbia
We reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused, then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — A dual citizen with a US retirement account, Burnaby, British Columbia
All 5 years were accepted as filed. $43,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 5 years.
Case Study 5 · Cash and remittance control
Remittance Schedule Corrected, $37,000 Refunded — US-Facing Canadian Corporation, Saskatoon
Client: A Canadian corporation with US customers · Where: Saskatoon, Saskatchewan · Engagement: 8 weeks, fixed fee
Overpayment refunded$37,000
Late remittances sinceZero
ScheduleAutomated
The situation — A Canadian corporation with US customers, Saskatoon, Saskatchewan
Remittances at a Canadian corporation with US customers in Saskatoon, Saskatchewan were consistently late by a few days, which was enough to trigger penalties every quarter. Behind it sat a US LLC taxed as a corporation in Canada, producing double tax on the same income.
What we did for A Canadian corporation with US customers, Saskatoon, Saskatchewan
We registered the payer for a non-resident withholding account, remitted the Regulation 105 amounts due, and applied for waivers covering the rest of the contract, then moved the remittance dates into a scheduled process rather than a monthly decision.
The result — A Canadian corporation with US customers, Saskatoon, Saskatchewan
Penalties stopped from the following remittance onwards, and $37,000 of overpaid instalments was refunded.
Case Study 6 · Sale and succession
$385,000 Sheltered By The Lifetime Capital Gains Exemption — US Pension Recipient, Surrey
Client: A Canadian resident receiving US pension income · Where: Surrey, British Columbia · Engagement: 10 weeks, fixed fee
Gain sheltered$385,000
ClosingOn schedule
Share qualificationMet
The situation — A Canadian resident receiving US pension income, Surrey, British Columbia
A Canadian resident receiving US pension income in Surrey, British Columbia had an offer on the table and 17 months to close. The shares did not qualify for the capital gains exemption, and a single shareholder holding every share, with no room to multiply the exemption was part of the reason.
What we did for A Canadian resident receiving US pension income, Surrey, British Columbia
We purified the corporation so the shares met the qualifying tests, then applied the treaty rate to the dividend withholding, filed the NR4 return, and remitted the shortfall before the CRA assessed the payer for it well ahead of the closing date.
The result — A Canadian resident receiving US pension income, Surrey, British Columbia
The sale closed on schedule with $385,000 sheltered by the lifetime capital gains exemption across the shareholders.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. 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.
