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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.

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.


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 & Vukets 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.


Heres’s what some of our clients have to say about their experience expanding thier business across international borders:

"It has been more than twenty years since we first enlisted the services of your acconting practice to advise us on our business nd accounting systems including tax advice for our local company and the publication of our Annual Financial Statements. As a result, with your guidance and advice, this company has grown over the years in a managed enviroment with consistent controls and management reporting which have proved invaluable.
We once again called on your expertise when we decided to establish a company in Washington State. For the Canadian entrepreneur, establishing a related company in the United States can be a daunting task especially when it comes to inter company agreements. The rules set by Canada Revenue Agency and the IRS for cross border trading between related companies can be complex however, with your assistance we managed to aviod many pitfalls some companies may experience when setting up business in the United States
We have relied on your professional advice for many years now and will continue to do so in the future and would not hesitate to recommend your practice to any company looking to set up business in the USA.."
Eric Lewtas
Delco Fireplaces Ltd


The information contained on these pages is for general use only. As it is not possible to include all situations and circumstances in a short information piece, all situations should be reviewed with a qualified professional. While all reasonable efforts have been made to ensure the information provided is accurate, no individual or organization involved in preparation or distribution of this material accepts any responsibility or liability for its content. If you have any questions, please give us a call.

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