A non-resident employee of a non-resident corporation (NRCo) will work for a year at a Canadian government department while remaining on the NRCo payroll as an NRCo employee. The Department would reimburse NRCo for the employee’s salary and benefits (with no mark-up thereof). In finding that NRCo would be required to file a T2 return by virtue of carrying on business in Canada, CRA stated:
[A] non-resident employer that sends an employee to Canada to exercise employment duties for the employer for one year would generally be rendering services in Canada. As such … NRCo would be carrying on business in Canada.
… We are not aware of any exceptions to the requirement to file a T2 where the non-resident corporation has no profit from the business carried on in Canada.