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🇨🇦 Revenu Quebec 9% withholding + CRA Regulation 105 coordination

Quebec Withholding on Services by Non-Residents — 2026

How Quebec's 9% withholding works for services performed in Quebec, when TP-1016-V or CO-1016 may be used to request a reduction, and how the separate federal 15% Regulation 105 rule fits in.

1. What the Quebec 9% withholding rule actually covers

Under section 1015R18 of the Regulation respecting the Taxation Act, a payer must generally deduct 9% from a payment for services rendered in Quebec by a person who is not resident in Canada. Revenu Quebec's administrative guidance describes the rule as applying to payments, other than payments made in the course of regular and continuous employment, to a person, including a corporation, that is not resident in Canada for services performed in Quebec.

Key Framework Highlights:
  • The Quebec rule is based on the service being performed in Quebec and the payee being non-resident in Canada; it is not a general withholding on every payment made to someone outside Canada.
  • The statutory exceptions include regular and continuous employment, payments to a registered non-resident insurer, and payments to an authorized foreign bank in respect of its Canadian banking business.
  • The 9% amount is a withholding mechanism. It is not automatically the payee's final Quebec income-tax liability.
  • Whether a payment is ultimately taxable can depend on the Taxation Act, the payee's facts, and applicable treaty or agreement provisions.
Action Checklist:
  • Confirm where the services are physically performed.
  • Confirm that the payee is not resident in Canada for the relevant purposes.
  • Check the statutory exceptions before withholding.
  • Determine separately whether federal Regulation 105 also applies.

2. Quebec reduction request: TP-1016-V versus CO-1016

Revenu Quebec does not use one universal Quebec waiver form for every non-resident service provider. Form TP-1016-V is the Application for a Reduction in Source Deductions of Income Tax and can be used by an individual, an individual in business, a partnership or another eligible entity. A corporation or limited liability company that is not resident in Canada uses Form CO-1016 to ask Revenu Quebec to authorize a payer to reduce the Quebec withholding on services rendered in Quebec.

ApplicantQuebec applicationPurposeImportant point
Non-resident individual / individual in business / eligible entityTP-1016-VRequest authorization to reduce Quebec income-tax withholdingRevenu Quebec decides whether to authorize a reduction; the form is not an automatic exemption.
Non-resident corporation or non-resident limited liability companyCO-1016Request authorization to reduce Quebec income-tax withholding on services rendered in QuebecDo not substitute TP-1016-V for the corporate form.
PayerNo waiver form of its ownApply the withholding required by law unless Revenu Quebec authorizes a reduction or another legal rule removes the obligationObtain and retain the authorization before reducing the required withholding.

3. What to include in a Quebec reduction request

For a non-resident who is not resident in Canada and is not subject to the Quebec Taxation Act in the ordinary way, Revenu Quebec says a request may be made using TP-1016-V or by written request. The request should include a copy of the Quebec service contract showing the parties, contract dates and duration, services and payments, plus proof of the applicant's country of residence and the dates of arrival in and departure from Quebec. For a non-resident corporation, use the CO-1016 process.

Key Framework Highlights:
  • Identify all parties to the contract.
  • State the contract dates and duration.
  • Describe the services and the payments to be made.
  • Provide evidence of country of residence.
  • Provide Quebec arrival and departure dates where applicable.
  • Explain the basis for the requested reduction and provide supporting tax information.

4. Federal Regulation 105 is separate

Federal Income Tax Regulation 105 generally requires a payer to withhold 15% from a fee, commission or other amount paid to a non-resident person for services rendered in Canada. CRA Form R105 is the application used by a non-resident self-employed individual or corporation to request a waiver or reduction. A CRA waiver does not by itself cancel the separate Quebec 9% withholding requirement.

JurisdictionCore ruleStandard rateReduction / waiver route
Canada — Regulation 105Withhold from amounts paid to a non-resident for services rendered in Canada15%CRA Form R105; relief can be treaty-based or based on estimated income and expenses, depending on the facts
Quebec — Regulation 1015R18Withhold from payments for services rendered in Quebec by a person not resident in Canada9%Revenu Quebec authorization using TP-1016-V or CO-1016, as applicable
Potential overlapBoth systems can apply to the same Quebec service payment24% before any authorized reduction or exceptionRelief must be considered separately under the applicable federal and Quebec processes

5. Treaty relief does not automatically eliminate withholding

Treaty entitlement and withholding procedure are related but distinct. CRA states that Regulation 105 withholding normally remains required unless the CRA authorizes a waiver or reduction. A treaty-based R105 request commonly considers whether the non-resident is protected by a treaty provision, including the absence of a permanent establishment where that is the relevant treaty test, but the exact treaty article and facts must be reviewed. Quebec states that Canada's treaties can be taken into account in Quebec to the extent that they provide an exemption from Quebec tax, and Quebec also has a separate tax agreement with France.

Key Framework Highlights:
  • Do not assume that having no permanent establishment automatically produces a zero-withholding result.
  • Check the specific treaty, the income category, the type of service, residency and the facts of the engagement.
  • A treaty position may affect final tax liability even when withholding still has to occur until the proper authority is issued.
  • For federal Regulation 105, CRA recognizes both treaty-based waiver requests and income-and-expense reduction requests.

6. Timing and workflow

Plan both applications before the engagement starts. CRA says a Regulation 105 waiver application should be submitted at least 30 days before services begin in Canada or 30 days before the initial related payment. Revenu Quebec says that, in most cases, its reduction request should be filed 30 days before services begin or before the first payment. A payer should continue to apply the normal withholding rules unless it has the required authorization or another legal exception applies.

Action Checklist:
  • Step 1 — Map the service days and payment schedule in Canada and Quebec.
  • Step 2 — Establish the payee's Canadian residency status and identify the legal entity receiving payment.
  • Step 3 — Check whether Regulation 105 applies federally and whether Quebec Regulation 1015R18 applies provincially.
  • Step 4 — Prepare the correct Quebec request: TP-1016-V for an eligible non-corporate applicant or CO-1016 for a non-resident corporation or non-resident limited liability company.
  • Step 5 — Prepare CRA Form R105 if a federal reduction or waiver is appropriate.
  • Step 6 — Submit supporting contract, residency and tax information early enough for review.
  • Step 7 — Give the payer the applicable authorization before reducing withholding.
  • Step 8 — If no reduction authorization has been received, apply the normal withholding rules and comply with the applicable remittance and reporting requirements.

7. What happens after withholding

Withholding is generally a prepayment mechanism rather than a statement that the withheld amount is the final tax. Revenu Quebec's corporation return guidance specifically allows a non-resident corporation that received a payment for services rendered in Quebec and had Quebec tax withheld to report the withholding on Form CO-17, where the corporation has a Quebec filing obligation. Individuals must determine their own Quebec filing requirements based on their residence, income and other facts. A refund or credit is therefore not automatic merely because 9% was withheld; it depends on the filing and tax position applicable to the taxpayer.

Key Framework Highlights:
  • Keep the payer's Quebec documentation and the relevant RL-1 information showing the withholding.
  • A non-resident corporation may need Form CO-17 where Quebec law requires a corporate income-tax return and can report qualifying Quebec withholding on that return.
  • An individual should not assume that TP-1 is required solely because 9% was withheld; filing depends on the person's Quebec tax obligations.
  • Federal and Quebec recovery processes are separate and should not be collapsed into one return or one waiver.

8. Payer compliance, reporting and penalties

The payer is responsible for making the required Quebec deduction and remitting it according to the applicable Revenu Quebec remittance rules. Revenu Quebec's RL-1 guidance requires payments for services rendered in Quebec by a person not resident in Canada to be reported under code RR. For source deductions that have been withheld but not paid or remitted by the prescribed deadline, Revenu Quebec's published penalty schedule is 7% when no more than 7 days late, 11% when 8 to 14 days late, and 15% when more than 14 days late, with interest also potentially applying.

SituationQuebec consequence described by Revenu Quebec
Required 9% withholding not properly handledThe payer may have a tax administration exposure; section 23 of the Act respecting the Ministère du Revenu contains a specific rule for section 1015 withholding and provides for interest in the stated circumstances.
Amount withheld but remitted latePublished source-deduction penalty rates are 7% for up to 7 days late, 11% for 8–14 days late, and 15% from the 15th day, plus applicable interest.
Required reportingPayments for services rendered in Quebec by a non-resident of Canada are reported on the RL-1 under code RR where the reporting rule applies.

9. Practical example: when the 24% arithmetic applies

Suppose a non-resident corporation is paid CAD 100,000 for services physically performed in Quebec and the facts trigger both federal Regulation 105 and Quebec Regulation 1015R18. Before any authorized reduction, the federal withholding would be CAD 15,000 and the Quebec withholding would be CAD 9,000, for CAD 24,000 total. The contractor receives CAD 76,000 before any other adjustments. This example illustrates withholding only; it does not determine the final federal or Quebec income tax owing.

CalculationAmount
Gross paymentCAD 100,000
Federal Regulation 105 at 15%CAD 15,000
Quebec Regulation 1015R18 at 9%CAD 9,000
Combined withholdingCAD 24,000
Amount remaining after these two withholdingsCAD 76,000

10. Key distinctions to avoid common mistakes

IssueCorrect treatment
TP-1016-V is the Quebec equivalent of R105No. They are separate Quebec and federal processes, and Quebec has different forms depending on the applicant.
Every non-resident uses TP-1016-VNo. Non-resident corporations and non-resident limited liability companies use CO-1016.
A tax treaty automatically means 0% withholdingNo. Treaty relief and withholding authorization are separate procedural questions.
24% is the Quebec withholding rateNo. Quebec's rule is 9%; 24% is only the arithmetic total if the federal 15% rule and Quebec 9% rule both apply.
9% withholding is the final Quebec taxNo. It is a source-deduction mechanism and can be reconciled through the applicable tax return process where the taxpayer has a filing and credit/refund entitlement.
TP-1 is required for every non-resident individual with 9% withheldNo. Individual Quebec filing obligations depend on the person's circumstances and applicable rules.

11. 2026 quick decision framework

Action Checklist:
  • Service performed entirely outside Quebec: the Quebec 9% services rule in Regulation 1015R18 generally does not apply solely because the payer or customer is in Quebec.
  • Service performed in Quebec by a person not resident in Canada: assess the 9% Quebec withholding rule and its statutory exceptions.
  • Non-resident corporation: use CO-1016 if requesting a Quebec withholding reduction.
  • Eligible non-corporate applicant: TP-1016-V may be used to request a Quebec reduction.
  • Federal services in Canada: separately assess Regulation 105 and Form R105.
  • Treaty position: identify the actual treaty article and factual conditions rather than relying on a generic permanent-establishment statement.
  • No authorization yet: do not assume the payer can simply reduce or stop the statutory withholding.

Frequently Asked Questions

It generally applies when a payer makes a payment, other than in the course of regular and continuous employment, to a person or corporation that is not resident in Canada for services performed in Quebec. Regulation 1015R18 also contains exceptions for certain registered non-resident insurers and authorized foreign banks.

No. TP-1016-V is used by an individual, an individual in business, a partnership or another eligible entity to request a reduction in source deductions. A corporation or limited liability company that is not resident in Canada uses CO-1016 for a Quebec reduction request.

No. Regulation 105 and Quebec Regulation 1015R18 are separate regimes. A federal R105 authorization does not, by itself, authorize the Quebec payer to stop or reduce the Quebec withholding.

Revenu Quebec says that, in most cases, a non-resident reduction request should be filed 30 days before the services begin or before the first payment. This should be treated as advance administrative guidance rather than a statement that every late application is automatically invalid.

No. A treaty may limit or exempt the underlying tax depending on the taxpayer, income type and treaty article, but the withholding procedure is separate. CRA generally requires Regulation 105 withholding unless it authorizes a waiver or reduction, and the Quebec treatment must also be considered.

The withholding is generally a prepayment mechanism. The taxpayer must determine whether a Quebec income-tax return is required and how the withholding is reported and credited. For a non-resident corporation with a Quebec corporate filing obligation, Revenu Quebec's CO-17 guidance provides for reporting qualifying Quebec withholding on the return; an individual should not assume that filing a TP-1 is required solely because 9% was withheld.

Official Government & CRA References

Key 2026 Rules

  • Quebec withholding9% of the payment
  • Federal Regulation 10515% of the payment
  • Potential combined gross withholding
    24% when both rules apply
  • Quebec reduction forms
    TP-1016-V or CO-1016, depending on the applicant

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