Taxes for International Companies and Individuals in Canada

Are you looking for information on international taxes and Canada? International companies and non-resident Canadians conducting business in Canada are subject to a wide array of different tax implications. Some of these implications include issues with permanent establishments, non-residential tax returns and withholding taxes.

My name is Allan Madan. In this article entitled, ‘Taxes for Internationals Canada’, I will tell you everything that you need to know about international taxes from a Canadian perspective.

Are you a US based company selling to Canadian customers, are you a non-resident investing in Canada, or are you a non-resident working in Canada? If you answered yes to any of those three questions, you have certainly come to the right place. Here, I am going to talk about the most important international tax issues for you.

Permanent Establishments and their Tax Implications:

A permanent establishment is a fixed place of business, or a project, or site in Canada lasting more than 12 months. If your company has a permanent establishment then it will have to file a Canadian corporate income tax return and pay Canadian income taxes. However, the good news is the Canadian government will only tax you on the profits earned from the permanent establishment in Canada and not from anywhere else.

How to Get Treaty Protection in the Case of No Permanent Establishment?

When it comes to global taxes and Canada, foreign companies doing business in Canada should file a treaty based return. This life saving form tells the CRA that you don’t have a permanent establishment in Canada and, therefore, do not have to pay Canadian income taxes.

Non-Resident Personal Tax Returns:

This issue is for non-residents temporarily working in Canada. Even as a non-resident you cannot escape the tax man. To clarify, non-resident individuals are those who live outside of Canada but only work in Canada for a period of less than 183 days throughout the entire tax year.

Reduce Your Withholding Tax on Payments Made to Non-Residents:

Withholding tax applies to the following payment; dividends, management fees, interests, rents, royalties, and payments made to non-residents for services rendered in Canada.

Thanks for reading and I hope you found this article about foreign taxes and Canada useful. Please comment as it helps me come up with more suitable content. Also, get access to a free report, ’20 Secrets on How to Beat the Tax man’ when you visit my website.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

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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