Hi!
I am a Canadian Citizen but a resident of the USA. I am
currently therefore
residing in the USA. If I were a USA sole proprietor, could I do
consulting
work in Canada?
Would I invoice the company (which is Canadian) in Cdn $, without
any taxes
... just a straight amount? I would claim my income (it would
likely be my
only income, this one consulting job) on a USA income tax return?
I appreciate any help.
Thanks,
l
--------------------------------------
david ingram replies:
No problem. If you are telecommuting or doing the business in
the USA, you will simply bill the company and they will send you
a check (cheque). If you are performing the work in Canada then
you have to watch out for GST. If you bill over $30,00 you have
to register for and charge GST. In that case, you would likely
have a fixed base and should expect to pay Canadian Income Tax as
well. You might also find that the Canadian Company wants to
withhold 15% or even 23% tax to satisfy their withholding rules.
If so, you will either get it all back under Article XIV of the
tax treaty, some of it back because it was more than it had to be
or will owe a bit more because it was not enough. In any of the
above situations, you will still report the income on a Schedule
C with your 1040 and will claim credit for any tax paid to
Canada on form 1116 on your 1040.
The two relevant sections of the US / Canada Income tax treaty
follow:
Article XIV
Independent Personal Services
Income derived by an individual who is a resident of a
Contracting State in respect of independent personal services may
be taxed in that State. Such income may also be taxed in the
other Contracting State if the individual has or had a fixed base
regularly available to him in that other State but only to the
extent that the income is attributable to the fixed base.
Article XV
Dependent Personal Services
1. Subject to the provisions of Articles XVIII (Pensions and
Annuities) and XIX (Government Service), salaries, wages and
other similar remuneration derived by a resident of a Contracting
State in respect of an employment shall be taxable only in that
State unless the employment is exercised in the other Contracting
State. If the employment is so exercised, such remuneration as is
derived therefrom may be taxed in that other State.
2. Notwithstanding the provisions of paragraph 1, remuneration
derived by a resident of a Contracting State in respect of an
employment exercised in a calendar year in the other Contracting
State shall be taxable only in the first-mentioned State if:
(a) such remuneration does not exceed ten thousand dollars
($10,000) in the currency of that other State; or
(b) the recipient is present in the other Contracting State for a
period or periods not exceeding in the aggregate 183 days in that
year and the remuneration is not borne by an employer who is a
resident of that other State or by a permanent establishment or a
fixed base which the employer has in that other State.
3. Notwithstanding the provisions of paragraphs 1 and 2,
remuneration derived by a resident of a Contracting State in
respect of an employment regularly exercised in more than one
State on a ship, aircraft, motor vehicle or train operated by a
resident of that Contracting State shall be taxable only in that
State.
To be commercial, that is what we do as a business and you are
welcome to send your return to us.
-----------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
US / Canada Real Estate Specialists
My Home office is 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 Vancouver (LA)
time - (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 for expert help, assistance,
preparation, or consultation 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"
David Ingram gives expert income tax & immigration help to
non-resident Americans & Canadians from New York to California to
Saudi Arabia to Mexico to China or Chile - Cross border, dual
citizen - out of country investments are all handled with
competence & authority.
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.
Pennsylvania, Rhode Island, Rockwall,
South Carolina, South Dakota, Tennessee,
Texas, Utah, Vermont, Virginia,
West Virginia, Wisconsin, Wyoming,
British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Quebec City,
New Brunswick, Prince Edward Island,
Nova Scotia, Newfoundland, Yukon and
Northwest and Nunavit Territories,
Mount Vernon, Eumenclaw, Coos Bay
and Dallas Houston Rockwall Garland
Texas Taxman and Tax Guru and wizzard
wizard - consultant - expert - advisor -advisors consultants -
gurus - Paris Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo Zimbabwe
international non-resident cross border income tax help
assistance expert preparation & immigration consultant david
ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) &
divorce preparer preparers consultants
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling,
Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples,
Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson,
Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton,
Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San
Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun
City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello,
Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City,
Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince
George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague,
Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers,
Berlin, Hamburg
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai,
Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red
Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie,
Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey,
Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney,
Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich,
Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries,
Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope,
Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis,
Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson,
Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape
Spears,
Truro, Charlottetown, Summerside, Niagara Falls, Albany Zimbabwe
David Ingram expert income tax help and preparation of US Canada
Mexico non-resident and cross border returns with rental dividend
wages self-employed and royalty foreign tax credits
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 Zimbabwe South Africa Namibia help USA US
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/20060613/16a32788/attachment.htm
What's Related