Generally, the minimum amount of security the CRA can require is $5,000 CAD but can be as high as $1 million CAD. The amount required is based on 50% of your estimated net tax remittable or refundable. In order to calculate the net tax, you will need your estimated Canadian net profit (Canadian sales less Canadian expenses) for the coming year. Once you have your net profit number, multiply it by 5% and then 50% to get your required security deposit amount. For example, if you estimate having a net profit of $200,000 CAD, your required security deposit would be $5,000 CAD ($200,000 CAD x 5% x 50%). Please note that non-residents are responsible for estimating the net tax as the CRA could question how you determined your required security deposit. Therefore, you will need to prepare a calculation and keep it for support in case the CRA ever asks for it.

There is an exception to the required deposit if the sales in Canada are expected to be less than $100,000 CAD annually and net tax is expected to be less than $3,000 CAD. The CRA allows you to complete a declaration form to waive the security deposit requirement.

Additionally, the amount of security required is reviewed annually. If at the end of your fiscal year-end, it is determined that the amount of security provided is not enough, the CRA can require you to send in additional funds.

The CRA accepts security in the form of cash, a certified cheque or money order, or a bond. A bond must be in a form accepted by the CRA:

• Transferable non-certificate bond guaranteed by the Government of Canada.
• A bond issued by a company that holds a certificate of registry to carry on the fidelity or surety class of insurance business in Canada, and that is approved by the President or the Treasury Board as a company whose bond may be accepted by the Government of Canada.
• A bond issued by a member of the Canadian Payments Association as provided for in Section 4 of the Canadian Payments Association Act.