A US corporation is considering doing business in Canada. What are some of the formalities that must be fulfilled?
Allan Madan, CA
You must obtain a Business Number, Sales Tax Number (i.e. GST #) and a Payroll Number, if there are employees.
If the corporation does not have a physical presence in Canada, then a Treaty-based corporate tax return must be filed every year in order to avoid paying income tax. Otherwise, absence of filing will result in the corporation paying income tax on gross revenue. If the corporation has a physical presence in Canada, a branch tax return must be filed and corporate tax must be paid at a rate of 30% of the profits.
Sales tax (GST) must be charged to customers at a rate of 5% (can be different, depending on the province).
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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