Canadian working for American Company in Canada

I have read and reread this entire thread. Looks to be worthy of further follow up. ie: researching all def's of forms listed and how they may (or may not) be relevant to a particular situation.

I feel as though I am about to hijack this thread and my apologies for doing so however I also feel it is on topic and may provide further information from further responses.

Scenario:

US company that deals with global clients wants to hire a CDN.
CDN works remotely. (virtual office)

CDN will have to visit US office once or twice a month for biz meetings and cultural interactions. CND will be running out of home office in Canada for US company.

CDN "may" participate in conferences, events and meetings abroad. That may be of benefit to said US company.

.

Now let's talk tax implications, visas and forms.

How does the CDN receive renumeration
Benefits? Most likely a non issue as US to CDN benefits do not transition.
Self employed or COMPANY U.S.A. employed.pros/cons?
Capital Gains - good point Steve. Need to look into that further because I was not aware. Thanks.

Comes down to, how difficult is it for a Canadian to work for a US company (virtually) while still residing in Canada. Sounds simple but perhaps not.

Comments?

lys

The immigration side of it is easy peasy, you just enter as B-1 when you go to talk to them.

The Canadian end is relatively simple, you set up your company as you would normally, you issue them invoices, they pay. The GST is zero-rated, you have to figure the exchange rate.

You also have to file a 1040NR with an 8833 to report your US income to the IRS and claim the tax treaty exemption.

Things get more complicated the more time you spend in the US.

(Edited because I didn't read the original question correctly!)

Stumbled accross this thread and felt like I should correct some misinformation; not for the original contributer (thread is over one year-old, he has probably moved on), but for people that might stumble upon this thread in the future looking for help.

Also, imho:
- On questions as complex as this, people should not be 'guessing' on the answer. If you don't know, say so, otherwise you could lead this poor guy down a very costly path.
- The advice you receive on a message board forum should not be considered a replacement for good professional advice. Rather, a forum such as this should be used to educate yourself so you can ask the right questions when you visit a qualified professional.

To correct some of the misinformation (***):

- It seems to be implied that you have a choice on how to handle this situation. You do not -- in most cases, there is a right or wrong answer. The U.S. employer should obtain a Canadian Business Number and a payroll remittance account. The U.S. employer will have the same obligations as a Canadian employer regarding source withholdings and remittances, with the exception of CPP.

- Regarding CPP, in most cases the US employer will have to obtain a special ruling to withhold and remit CPP (along with their matching contribution). This form can be obtained from the Canada Revenue Agency website. EDIT: To be clear, CPP -- in most cases -- is optional. So, you and your U.S. based employer could agree that CPP will not be withheld/remitted.

- Based on the facts provided, you are not required to file a US tax return of any kind.

- The worst advice provided in this thread is to not claim 'office in home' expenses because of some imagined tax problem. Do not deny yourself this very attractive deduction!!! The only way you will run into a tax problem is if you go so far as to claim tax depreciation (technical term: capital cost allowance) on a portion of your home. This is tax 101 and the deduction wouldn't flow very naturally from the various tax schedules; so, a professional is not likely to do this and for you to "accidently" take the the deduction would be very difficult.

(***) This is all given the information presented. You should still see a qualified professional as it is very difficult to effectively share information in a forum such as this. Please accept my comments 'FYI' only and as a guide to asking the right questions of your tax advisor.

Thanks for your input, bob. A forum is just that. Your post is 100% accurate.

There is quite a bit of misinformation on this site -- which after all is nothing more than a social networking and travel site, not even an immigration board or tax board -- , and I've tried to overcome some of it. I figure once a post is a few months old it isn't worth correcting. baby steps.

I encourage any US/Can cross-border tax questions to go to forums.serbinski.com, where answers are I have to say, a little bit more cogent and accurate.

- The worst advice provided in this thread is to not claim 'office in home' expenses because of some imagined tax problem. Do not deny yourself this very attractive deduction!!!

It's not imagined, you can expose that office space to capital gains tax which outweighs the tax deduction, usually by a large margin depending on where you live.

As for them getting a BN and doing Canadian withholding, this is not strictly necessary and not usually done for one-off people in Canada, usual method is for the person to become self-employed, do the withholding themselves and issue invoices which I did explain earlier in the thread.

Hello everyone... I have a similar question if anyone can help me...
So I am Canadian and now have a permanent resident card for the USA (Green Card). My question is I am back here in Canada for awhile and will work for My company that i have started in the USA... I need to know How this can be done or better yet when the company I invoice up here in Canada for My Company in the USA what taxes are needed to pay and is it just for the USA or do I have to pay taxes now for both countries... any advice would be great.. thank you all in advance for any help...