INTERNATIONAL BUSINESS

Canada / United states cross-border taxation

Wanting to expand your business into Canada or the United States? Van Wensem & Associates can guide you through the process by advising on:

Permanent Establishments

The first step in expanding your business to another country is determining if you have a permanent establishment in the other country. This can be determined through the domestic tax codes/acts and by reference to the tax treaty between the two countries. This will determine what taxes you need to register for and collect and whether you need to establish a foreign entity.

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Proper structure

US alternatives include opening a foreign branch; Limited Liability Corporations (LLC’s); C corporations; S corporations; Limited Partnerships (LP’s); and Limited Liability Partnerships (LLP’s).

Choosing the wrong one can cost you big time – for example LLC’s are rarely beneficial for Canadian residents, as they are not recognized entities under the Canada / United States Income Tax Treaty and can result in double taxation as foreign tax credits are not always available.

Canadian alternatives include a branch; various forms of partnership; federal corporation; provincial corporation; and hybrids such as an unlimited liability corporation;

Again choosing the form that’s best suited to your situation is critical. For example repatriating profits to your home country can be maximized by setting up a structure that takes advantage of proper transfer-pricing policies and minimizes taxes on dividend distributions.

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Registrations

Registering with the proper authorities:

Doing business in the United States or Canada means you need to determine which taxes need to be collected and which agencies you need to register with. If you are doing business in Canada, will you be required to register to collect GST/HST (Goods and Services tax /Harmonized Sales tax); how do you pay your employees and what withholdings are required? What other taxes are applicable?

Van Wensem & Associates can help you with these questions and more. Our knowledge base and relationships with US based attorneys and CPAs let us quarterback your business expansion, ensuring your cross-border expansion has the best chance for success.