Tax Waiver (Regulation 105 Waiver)

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2634 viewsDecember 29, 2017

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Anonymous Posted December 29, 2017

I found your web page about US citizens working in Canada and have a few questions. I’m plan to start working in January 2018 for a Canadian organization in Vancouver, BC, as an independent contractor (grant writer for nonprofit arm of a corporation). I live near Seattle, WA. When I start, I will come up for one week, then after that I will probably only come up to Vancouver, BC one day every other week, and then work from home the rest of the time. My US accountant told me to apply for a tax waiver from the Canadian government. However, it asks for the dates of my work in Canada, and I plan to work on an ongoing basis.

Please advise me on the best way to handle my tax situation so I don’t pay double taxes in the US and Canada. Is the tax waiver (Regulation 105 Waiver) appropriate for my situation?

1 Answer

score 0 · Answer 1 · 2017-12-29T15:34:54+00:00

You could apply for a tax-waiver (regulation 105) to stop withholding tax from payments made to you by your Canadian customer. BUT, the tax only applies to payments made in respect of services physically performed in Canada. This will come to a small amount, since you are only working physically in Canada for a few weeks. In addition, you can claim a foreign tax credit on your US return for the Canadian taxes deducted. As a result, it’s not worth your time or effort to apply for a regulation 105 waiver.

Tax Waiver (Regulation 105 Waiver)

1 Answer

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