My_question_is: Applicable to both US and Canada Subject: Self Employed sales rep in US/ Living in Canada Expert: taxman at centa.com Date: Saturday August 05, 2006 Time: 01:07 PM -0700 QUESTION: I am self employed sales rep working a territory in the US for a US company, paid in US funds. I live in Canada. I am a dual citizen. Should I be paying social security in the US on the profits of my business or paying Social Insurance in Canada? --------------------------------------------------------------- david ingram replies: Congratulations on making productive use of your dual nationality. You are in an interesting position. When self-employed with no fixed base in the US, you do not pay US tax under Article XIV of the US / Canada Income Tax Treaty. If you do have a fixed base, that is an office or store you are working out of, then you would pay tax to the US and the state or states you are working in. Under the US / Canada Social Security Totalization Agreement, you only pay FICA or CPP to the Country you are living in if self-employed. So, if you have no US office you are working out of, you are not taxable and do not pay FICA or Medicare to the US although, as you know, you have to file a tax return and claim the exemptions. If you have a US office (this does not mean the US company's office you are representing if you are self-employed), you are taxable in the US for income tax but not for FICA. For the record, the best for you is to be paying both tax and FICA to the US because Canada gives you a dollar for dollar tax credit against your Canadian taxes and the US social Security pays more than Canada Pension. 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