QUESTION: I've been offered a "part-time" VP of Corporate Bus. Development for a Canadian start-up (5 days per month) ... essentially a consulting arrangement, but with a VP title. If they pay me as a consultant, do I owe both US and Canadian taxes (I'm a WA state resident, US Citizen)? If they consider me an employee, do I owe both US and Canadian taxes? I have a US-based sole-proprietorship licensed in Washington state...can I just add the consulting salary to my proprietorship revenues and pay US taxes on the consulting income? Thanks! ==================== david ingram replies: Although you maybe able to get a TREATY NAFTA management consultant visa, it is unlikely that you would be able to get a visa to come to Canada to work as a V-P for 5 days a month. You should turn down the title unless it only applies to your duties performed in the USA. In a similar situation, we obtained a TN visa as a management consultant for the Canadian General Manager of a US company. The Canadian General Manager was a specialist and we got him a Management consultant visa to go to various cities in eh US and advise the local managers on who they should hire in their areas. They would have several people picked out and our man would fly to Washington or New Orleans or Salt Lake City, analyse the prospects and advise the manager about who he suggested should be hired. If you are commuting on a daily basis (5 days a month) as a genuine consultant, I would say that you were not taxable in Canada under Article XIV of the Canada / US income Tax Convention (treaty). However, your description of the position pf V=P means that you must really be an employee. As an employee you are exempt from Canadian tax in any calendar year you earn les than $10,000 under Article XV of the Treaty. However, if you earn $10,001, you are taxable in Canada on everything including the first $10,000 that "was" exempt $2.00 ago. On the other hand, if your trip to Vancouver is a "fact finding" mission and you gather information and then go back to your US office to do the actual work, you do NOT need any visa to enter Canada. You are merely entering as a business visitor. If you do pay tax to Canada including EI (Employment Insurance) and CPP (Canada Pension Plan) The tax, CPP and EI are deductible against actual US tax (you have to report the earnings again on your US 1040) on your 1040 by claiming the Canadian Taxes on US schedule 1116. You need to spend a few dollars and get the low-down on what you intend to do. A wrong slip could get you in Canadian Tax AND IMMIGRATION trouble. Hope this helps and of course, I/we would be glad to help you. david ingram -------------------------------- 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 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 specializes in giving expert income tax and immigration help to American and Canadian citizens living out of their home countries from Zimbabwe to Saudi Arabia to Mexico to China or Chile - Cross border, Non-resident - dual citizen - out of country investments are all handled with competence and authority. 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/> . 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