Individuals who are residents of Canada are taxable on their worldwide income. To ensure all Canadian residents correctly report their worldwide income, the tax law requires Canadian residents annually file with the CRA the Form T1135 Foreign Income Verification Statement (commonly referred to as foreign property reporting) if they own, at any time during a year, “specified foreign property” with a total cost of more than $100,000 Canadian dollars. Generally speaking, specified foreign property includes funds or investments situated, deposited or held outside of Canada; debts receivable from or shares of non-resident corporations; real estate property, life insurance policy issued by a foreign issuer and interest in a non-resident trust. Read more →
Do you engage foreign individual or company (collectively referred to as “non-resident person”) as independent contractor to provide services in Canada? Are you the non-resident person providing independent contractor services in Canada? If you answer yes to either question, do you know that payments made in respect of services rendered in Canada by non-residents are subject to Regulation 105 withholding at a rate of 15%? There is an additional 9% withholding if the services are rendered in the province of Quebec by non-residents. These withholding requirements simply act to ensure that non-resident recipients of the service payments pay any Canadian income tax duly owing. Read more →
Immigrants to Canada are given a permanent resident status so as to have the legal right to live, work or study anywhere in Canada. Immigrants need to meet Canadian residency requirements in order to keep their permanent resident status. There is a misnomer that immigrants in fulfilling their Canadian residency requirements as permanent residents of Canada should also be residents of Canada for tax purposes. As explained below, the permanent resident requirements are different from the tax resident requirements. Thus, in reality, it is possible for permanent residents not to become tax residents of Canada while maintaining their legal status as permanent residents in Canada. Read more →
Canada’s tax system is based on self-assessment. In order for the governments to maintain public confidence in the fairness and integrity of Canada’s tax system, the Canada Revenue Agency (the “CRA“) is empowered to audit taxpayers of their compliance of the Canadian tax laws. If you have received a notification letter from the CRA that you are selected for a tax audit, this article will give you an overview of the audit process, your rights and obligations as a taxpayer under audit and the strategies you can employed to handle the audit process with the objective to achieve the best possible tax outcome for your particular situation.
If so, do you want to minimize your Canadian taxes on the future income to be generated from such overseas inheritance? If your answers to both questions are “yes”, you will have to initiate your planning process before the death of the person from whom the overseas inheritance is expected to come. Read more →
Canadians earning income from US rental property can be fraught with unexpected cross-border tax problems, which could severely hurt their after-tax return on investment. It is important to consult a cross-border tax professional before the purchase to understand all the US and Canadian tax implications of owning US rental property and to make the best decision for their situation on the right structure to own and finance the purchase of US rental property. Read more →
If your company is a foreign corporation doing business in Canada, this presentation will give you an overview of how Canada taxes your company’s profits from carrying on a business in Canada.
Just by way of background, my name is Claudia Ku. I am a Chartered Professional Accountant and a Chartered Accountant in Toronto, Ontario. I am a tax accountant with specialized knowledge and experience in Canadian international tax. I help my foreign corporate clients to manage their Canadian tax issues, whether they are income taxes, withholding taxes, payroll taxes or sales taxes. I also help them to meet all their Canadian tax filing requirements. More importantly, I help to structure their Canadian operations so as to minimize the effective worldwide tax rate of the foreign parent company.
This article provides a general overview of the Canadian income tax framework relevant to non-resident multinational corporations doing business in Canada directly or indirectly through a partnership. This article does not cover the scenario where the non-resident corporations carrying on a business in Canada through a Canadian subsidiary.
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