Understanding Form T2062 Request for a Certificate of Compliance: A Guide for Non-Residents

If you’re a non-resident of Canada and you’re selling taxable Canadian property, you may need to file a T2062 Request for a Certificate of Compliance with the Canada Revenue Agency (CRA). This certificate ensures that any taxes owed on the disposition of the property are paid before the transaction is completed. We’ll break down what you need to know about Form T2062, its requirements, and how to navigate the process.

What is a Certificate of Clearance for a Non-Resident in Canada?

The T2062 Certificate of Compliance is a document issued by the CRA to confirm that a non-resident has complied with Canadian tax laws when disposing of taxable Canadian property. Taxable Canadian property includes real estate, shares in certain corporations, and other types of property that may be subject to Canadian tax on disposition.

When is Form T2062 Required?

Non-residents must file Form T2062 if they are disposing of taxable Canadian property and want to ensure they are not held liable for unpaid taxes in Canada. This form must be submitted within 10 days after the disposition of the property, and it applies to both individuals and entities. Filing this form helps the CRA verify that any taxes owed on the sale are properly accounted for and that the non-resident is in compliance with Canadian tax laws.

The following forms may be required:

• Form T2062: Request by a Non-Resident of Canada for a Certificate of Compliance Related to the Disposition of Taxable Canadian Property.
• Form T2062A: Request by a Non-Resident of Canada for a Certificate of Compliance Related to the Disposition of Canadian Resource and Timber Resource Property, Canadian Real Property (other than Capital Property), or Depreciable Taxable Canadian Property.
• Form T2062B: Notice of Disposition of a Life Insurance Policy in Canada by a Non-Resident of Canada.

How to File Form T2062

To file Form 2062, non-residents must provide detailed information about the property being sold, including the purchase price, sale price, and related expenses. Along with the form, submit any required supporting documentation as outlined on Form T2062 or Form T2062A. Missing documentation can delay the issuance of your Certificate of Compliance. If reporting an actual disposition and paying the taxes owed or providing acceptable security, the CRA will issue Form T2068, the Certificate of Compliance. If you are reporting a proposed disposition, the CRA will issue Form T2064. If the actual disposition differs from the proposed one, you’ll need to submit another form with any adjustments and provide additional payment or security. Payments can be made by wire transfer or cheque.

Obtaining a Canadian Taxation Number

Non-residents must have a Canadian taxation number when filing Form T2062. For individuals, this is typically a Social Insurance Number (SIN), Temporary Tax Number (TTN), or Individual Tax Number (ITN). If you don’t have a SIN, you can apply for an ITN using Form T1261. Corporations need a Business Number (BN), while trusts may need a Trust account number. Ensure you have the correct number before filing to avoid delays in processing your request.

Penalties for Late Notification

Non-resident vendors who fail to notify the CRA of a property disposition within the 10-day period will incur a penalty. The penalty is $25 per day for each day the notification is late, with a minimum of $100 and a maximum of $2,500. If a Certificate of Compliance (Form T2064 or T2068) is not issued, the purchaser may become liable to pay the tax resulting from the disposition on behalf of the vendor. In this case, the purchaser has the right to withhold 25% (or 50% for certain properties) of the proceeds, minus any certificate limit.

Non-Resident Property Tax Services Made Easy

Cross & Co specializes in non-resident tax filing services across Nanaimo, Ladysmith, Parksville, Qualicum, Port Alberni, Duncan, and Lake Cowichan. Our team of experts can guide you through the process and ensure compliance with CRA requirements. Book an appointment with our tax specialists today and make your non-resident tax filing simple and hassle-free.