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U.S.-Canadian Tax Issues: Nexus, Treaty Benefits, Treaty-Based Returns, Regulations 102 and 105 Withholding

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, May 6, 2020

Recorded event now available

This course will discuss key issues regarding income tax and sales tax compliance obligations for entities doing business in Canada. The panel will outline issues that companies face when doing business in Canada, including a review of the Canadian system of taxation, reporting obligations that may be triggered for nonresidents, and the benefits provided by the U.S.-Canadian Tax Treaty.

Description

U.S. businesses selling in Canada may find themselves having reporting obligations for income tax withholdings and collection and remittances of sales taxes in Canada. Companies may be obligated to file Canadian tax returns. The U.S.-Canadian Tax Treaty provides an avenue to mitigate or eliminate Canadian income taxes. As described in the treaty, businesses with permanent establishments in Canada are subject to taxation. Understanding what constitutes a permanent establishment is critical for companies engaging in activity with Canada.

Canadian Regulation 105 Waivers allows certain U.S. taxpayers to avoid the mandatory 15% withholding tax, but it must be applied for beforehand. Similarly, Regulation 102 Waivers provides relief from required employment withholding taxes for certain businesses. Practitioners working with companies operating in or with Canadian organizations need to understand the nuances of Canadian taxation, and how to apply the substantial benefits offered by these regulations. Businesses may nevertheless still have sales tax collection and filing obligations.

Listen as our panel of experts provides essential guidance for doing business in Canada, including selecting an appropriate business structure, and avoiding or minimizing Canadian and provincial taxes, as well as repatriation strategies for U.S. taxpayers.

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Outline

  1. Overview of the Canadian tax system
    1. Carrying on business in Canada
    2. Permanent establishment
    3. Treaty-based returns
  2. Withholding taxes: Regulation 102 and 105 Waivers
  3. Federal goods and services tax/harmonized sales tax
    1. Common transactions: goods, services, intangibles
    2. Registration requirements
    3. Pitfalls and planning
  4. Quebec sales tax
    1. General regime
    2. Specified regime: new obligations for nonresidents
  5. Provincial sales taxes (British Columbia, Manitoba, and Saskatchewan)
    1. Nonresident registration requirements
  6. Voluntary disclosures
  7. Canadian business entities
  8. Financing structures
  9. Business acquisitions
  10. Repatriation strategies

Benefits

The panel will review these and other key issues:

  • Current trends in Canadian tax audits
  • Determining appropriate business structures
  • Implementing repatriations strategies
  • When to file a treaty-based return
  • What constitutes a permanent establishment in Canada?

Faculty

Ball, Laura
Laura Ball, CPA, CA
Senior Manager, International Tax
BDO Canada

Ms. Ball focuses on advising foreign controlled companies doing business in Canada and Canadian companies growing and...  |  Read More

Goudy, Bruce
Bruce Goudy, CPA, CMA
Director, Indirect Taxes
BDO Canada

Mr. Goudy has more than 25 years of experience providing advice on indirect tax issues, including assistance with...  |  Read More