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Canada: Updated CRA position on travel restrictions, relief for non-resident employers (COVID-19)

Canada: Updated CRA position on travel restrictions

The Canada Revenue Agency (CRA) has clarified its position on certain cross-border tax issues caused by travel restrictions resulting from the coronavirus (COVID-19) pandemic.


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In the updated guidance (15 October 2020), the CRA:

  • Confirmed that it will generally consider the Canadian government's recommendation to Canadians to return to Canada as a “travel restriction”
  • Stated that it will provide relief for certain non-resident employers who would be subject to Canadian withholding, remitting, and reporting obligations due to non-resident employees working remotely in Canada because of the travel restrictions


The CRA in May 2020 issued guidance to address cross-border income tax issues caused by COVID-19-related travel restrictions. In that guidance:

  • The CRA generally clarified that prolonged stays in Canada resulting solely from travel restrictions would not necessarily affect the tax residency or permanent establishment of a non-resident entity.
  • The CRA advised that such travel restrictions might not affect the tax residency of a non-resident individual, or the ability of a cross-border employee to qualify for treaty benefits on employment income.
  • Additional information was provided for requesting certain waivers, notifications for certificates of compliance, and non-resident employer certification.

The guidance was effective to 30 September 2020, and taxpayers were advised to contact the CRA if their situations continued past this date.

Read an October 2020 report prepared by the KPMG member firm in Canada

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