Paid by an American company - W8-ECI Certificate of Foreign Person's Exemption From Withholding

I have a business that is doing contract work for a U.S. company.  The work is being done from Canada and I will not need to travel to the U.S.  However the company wants me to fill out a W-8ECI form.  This form states that I would have to file a U.S. tax return. Would I have to file in the U.S. and what is the proper form I should be filling out?

Thank You

david ingram replies:

I think you are the person who talked to me on the phone as well.

I am answering this to send to the group to seeif any of the others have a differnt idea.

The W8-ECI form is designed to stop withholding taxes.  To Quote: "Certificate of Foreign Person’s Claim That Income Is
Effectively Connected With the Conduct of a Trade or Business in the United States"

See the form at:

Filling it out will stop the payer from deducting tax.  The form has you agreeing to file a USD tax return which on the surface makes no sense.  However, if you did, since all the profits are in Canada and you have no fixed base of operation in the US and are not doing anything 'in' the United states, if you do file a tax return, it would be claiming all profits tax free under the US Canada Tax Treaty.

Anyone any other opinion?  This is / has been tightened up under the auspivces of the new US Canada Tax Treaty signed on Sept 21, 2007. �