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6. Subsection 215(1) requires the payer of any amount subject to tax under paragraph 212(1)(d) to withhold from the non-resident and remit to the Receiver General the amount of the tax imposed. Since rent is normally paid in advance, the payer is frequently obliged to withhold tax before the actual time in Canada has been established (making an exact computation of applicable withholding tax impossible). Consequently, it is acceptable to base amounts withheld on reasonably estimates drawn from proposed itineraries for the period covered by a rental payment. If a contract involves a series of rental payments, it is expected that excess or deficiencies in tax withheld from earlier payments will be adjusted in the amounts withheld from subsequent payments. The Department will not apply the penalty provisions of paragraph 227(8)(a) in respect of a deficiency in tax withheld if a payer can demonstrate that these guidelines were followed in good faith.
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