Moving south While keeping Ontario Incorporation.

Question

2828 viewsJanuary 25, 2017Cross Border Tax

0

Anonymous Posted January 24, 2017

I have an ontario corporation that I use for some consulting work. I am planning to move to the US for few years and I was wondering if I can keep my ontario corporation without any tax implications. I understand the residency requirement for ontario corporation and I can solve that by adding new directors. However, is there any work around for the residency requirement (e.g incorporating in a province with no residency requirement). What are my options for maintaining a corporation in canada and what are the tax implications while in the US and exiting from the US eventually?

1 Answer

score 0 · Answer 1 · 2017-01-26T15:13:35+00:00

There are two major tax implications. First, the tax status of your corporation will change from a Canadian Controlled Private Corporation to an Other Private Corporation. As a result, the tax rate will increase from 15% to 26%. Second, you could be liable for departure tax when leaving Canada to the US. When you leave, you will be deemed to have disposed of your shares in your corporation for a price equal to fair market value. If the value of your shares is more than the amount you paid for them, you will have a taxable capital gain upon departure.

Moving south While keeping Ontario Incorporation.

1 Answer

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