US Canada Tax Treaty Tag

Global Intangible Low-Taxed Income – Simplified! The Tax Cuts and Jobs Act of 2017 (TCJA) brought some major changes for U.S. taxpayers. The Global Intangible Low-Taxed Income (GILTI) regime was enacted to tax the U.S. Shareholders of Controlled Foreign Corporations (CFC) on a current basis. TCJA introduced Transition tax and GILTI. Transition tax (Sec 965) is a one-time tax on the...

A hybrid entity is an entity that has different tax treatments in different countries. The typical examples of these entities are US Limited Liability Company (LLC), Limited Liability Partnership (LLP) or Limited Liability Limited Partnerships (LLLP). We have previously published a high-level overview of the taxation of US LLCs in Canada. This post is an attempt to further explain why using...

Effective February 12, 2021, the Internal Revenue Service (IRS) has begun receiving 2020 tax returns in the U.S. In 2020, the American have moved to Canada in record numbers. Whether you have recently moved to Canada or have been living here for a while, there are a couple of things to know when it comes to your tax obligations. Disclaimer: This post is for general information purposes and...

As we are in the final quarter of 2020, many wonder if they are subject to U.S. Income taxes due to the travel restrictions earlier in the year! Good News: Yes, there is an exception available! Generally, if you meet the substantial presence test (SPT), you are subject to U.S. income tax filing requirements. May Canadians spend a significant portion of the year in the U.S. especially in...

Canada is the second-largest trading partner of the United States. Both economies are interconnected and businesses on both sides of borders are subject to two-income tax rules of both countries. There is a Canada-US tax treaty that provides relief from double taxation. Caution: US Income tax, both for individuals and businesses, is one of the most complex tax systems in the world. The below...

During recent times there is an uptick in E-commerce sales, especially due to COVID-19 Pandemic. With closures of more and more retail stores, customers are ordering online. Amazon is one of the biggest online retailers in the world. Many Canadian businesses have a presence on Amazon, both Amazon Canadian Store and US Stores. This post is for general purposes only and cannot be considered as...

Rental income is the income from renting of real or movable property in Canada which you own or have use of. Rental Income can be income from renting an apartment, house, offices or other shared spaced in building. Canada taxes its residents on their worldwide income. If you are not a resident of Canada, you will pay taxes on your Canadian sourced income. Rental income from property in Canada...

Canada taxes its residents on the worldwide income. When a person (individual) moves to Canada (Immigrate) or move out of Canada (emigrate) he is considered to be a part-year resident for tax purposes. Part-year residents of Canada and their taxation In Canada, part of the year when an individual is considered a resident of Canada is taxed on his worldwide income for that part of the year...

What is a US LLC? A Limited Liability Company (LLC) is a type of business entity that is created by a state statute in the US. This type of structure does not exist in Canada. You cannot create a Limited Liability Company in Canada, however, you can still use a US LLC to conduct business in Canada. Generally, for tax purposes in the United States, an LLC with one member is considered a...

What is a Snowbird? If you are a Canadian and spend winter in the U.S. you may, unknowingly, become a US resident under the tax laws of the United States. So, now you are a tax resident of both Canada and the US. Snowbirds are the Canadians spending their winters in the United States. When you spend winters every year for a prolonged period of time in the United States you may meet the...