Sat Apr 18, 2009 5:13 pm
You can register self-employed on the CRA website and get a Business Number. You also need to register for GST and you may have to do installment payments on your income tax as well.
Basically you have to do the employer's and employee's CPP deductions as well as income tax but not EI.
You invoice them and they pay you, foreign services are GST zero-rated, so you just put down GST: 0% on your invoices with your GST number.
Depending on how much money you earn (I can never get a straight answer from the IRS, but certainly if you are earning over $100,000) you need to file a 1040NR and an 8833 every year as well, this is merely an informational return and you don't owe any tax as none of the work is done in the US. If you do actually do work in the US you have to give them a completed 8233 as well. Meetings, training and things like that aren't "work" unless for some strange reason they pay you for them, you can claim the travel expenses in Canada.
If you want to be more sophisticated, you can set up a CCPC and do it that way and issue yourself a T4 every year, this usually has tax advantages if you're earning a lot, however it has the big downside that it exposes you quite badly to departure tax so bear that in mind if an accountant says to you you'd be better off setting up a corporation.
As with an individual, it also has to file informational returns with the IRS, except in the case of a corporation it's an 1120-F and an 8833.
If you enter for meetings, taking orders and so on, just print up some business cards so you have something to show CBP when you enter, it's not normally a problem.
Do a web search for "B-1 NAFTA entry" if you want to read the regs.
Steve.