18 July 2007 External T.I. 2007-0242081E5 - Payroll Withholdings by Non-Resident Employer -- summary under Paragraph 153(1)(a)

In response to a question as to whether a company resident in the U.S. is required to obtain a payroll number and withhold payroll deductions from the wages it pays to an employee who is a Canadian-resident and renders his services to the U.S. company partially in Canada and partially in the U.S., CRA stated that an employer is required to deduct withholdings at source from the salary it pays to an employee who is a resident of Canada, regardless of where the services are rendered, but went on to note that the individual may be able to obtain a "letter of authority" from CRA to authorize the U.S. employer to reduce the deductions at source to take into account any available foreign tax credit.