Is it possible for a U.S. S-Corp to avoid paying Canadian and provincial taxes on income from a Canadian client (consulting) and instead opt to pay U.S. corporate taxes?

Question

2036 viewsMay 9, 2019Accounting

0

Anonymous Posted May 7, 2019

Is It Possible For A U.S. S-Corp To Avoid Paying Canadian And Provincial Taxes On Income From A Canadian Client (Consulting) And Instead Opt To Pay U.S. Corporate Taxes? Hypothetically, the consulting fees would total $7 mill. Or is there a way to offset the higher Canadian rate?

1 Answer

score 0 · Answer 1 · 2019-05-09T13:58:52+00:00

It depends on several factors:

– Where are the services performed? Canada or the US?
– If the services are performed in Canada, how many days are you or your
employees physically present in Canada?
– What are the total revenues of your company for the year?
– If the revenue from the Canadian contract is generated by a single person
performing services in Canada does the Canadian contract revenue exceed 50%
of the total company’s revenue for the year?

Depending on your answers, your company may or may not have a Canadian tax liability.

Is it possible for a U.S. S-Corp to avoid paying Canadian and provincial taxes on income from a Canadian client (consulting) and instead opt to pay U.S. corporate taxes?

1 Answer

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