INTERNET sales by Canadian from computer and employer
listen to David Ingram most Thursdays on Channel 114 Sirius Radio The Good Life with Jesse Dylan Daily at 12 noon New York time - david Ingram International Income Tax expert - real estate IRA's 401(K) My question is: Applicable to both US and Canada QUESTION: Hi David, I'm a Canadian citizen that lives in Vancouver. I receive monthly sales commission from US StateXXX every month. These are related to services I perform on the internet. These commissions total $180,000 US a year. My questions Am I required to pay GST on these sales? And is it better to pay the tax in Canada or some of it in the US/ balance in Canada? I will be receiving a US tax form with my earnings on it from US StateXXX. --------------------------------------------------------------------------- david ingram replies: Well, the good news is that it does not matter. Your ultimate tax on EVERYTHING will be paid to Canada. Any tax paid to Oregon and the US federal government will be a foreign tax credit and should be / will be deducted from any tax paid to the USA. ------- Now what is the problem, here? If you had asked me the same question a year ago, I would have been adamant that you had NO US tax liability whatsoever. However, since then, the State of New York won a tax case where they taxed a Nashville, Tennessee man on the earnings he received from a New York Employer for work he did on the New York Employer's computer in New York, even though he was physically in Nashville. He lost it on the first appeal and I do not think he has appealed it further so for the state of New York at least, working on a New York State computer over the internet makes you taxable in New York. In your case, it sounds like you will be getting a W2 or a 1099 or a 1042S reporting your earnings as from Oregon. I suggest that you file accordingly and pay the tax there and then claim the credits on your Canadian return. Glad to prepare them for you. And, of course, if the money was all earned from sales to US buyers, there is no GST. If "YOU" know that you made 10% of your sales back to Canada, then 7% GST should be paid on that percent of your income but you will also get to deduct the GST you have paid out earning it all. That would include GST on the purchase of your computer (assuming you received a 1099 or 1042S), GST on your internet access and other expenses you can deduct. If you receive a W2, you can NOT deduct the GST but you do NOT owe it either but we have to change the method of paying you for the future. If you are self-employed, we / you DO NEED to file a GST return whether you owe GST or not because your income was over $30,000 Canadian. ----------David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists Home office at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com <http://www.centa.com> . If you forward this message, this disclaimer must be included." Be ALERT, the world needs more "lerts" -------- This from "ask an income tax and immigration expert" from www.centa.com <http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or www.featureweb.com <http://www.featureweb.com/> . David Ingram deals on a daily basis with expatriate tax returns with: multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax Immigration Wizard Antarctica Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Garland, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. 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