Canadians Selling or Providing Services to the United States

Larry Stolberg - 11-5-15

If you have accounts receivables from a US entity, you may get the request for a W8-BEN or a W8-Ben-E form. Without this form, the payor of your accounts receivable will withhold a non-resident tax. The only way to get the refund of the tax is to file a US non-resident return, either a 1040NR for  individuals or a 1120F for corporations. The waiver form indicates to the payor that you are exempt from US taxation under the Canada/U.S. tax treaty.

Note that if you are considered to be carrying on business in the United States, then the waiver may not apply if it is  considered that you also have a permanent establishment in the United States by virtue of Article V of the treaty. In this regard you should obtain professional advice on your U.S. tax and compliance obligations.

Generally a protective tax return is filed to  ensure you avail yourself of available deductions against US source gross income should the IRS take a contrary view.

Original Post By:  Larry Stolberg

Larry Stolberg, CPA, CA, CPA (South Carolina), has been practicing as a full-time tax specialist for over 30 years, in the Toronto, Ontario Canada and surrounding GTA area with primary emphasis on:

•Corporate restructuring for business owners
•Estate/succession planning
•U.S. expatriate and cross border issues
•Tax efficient planning that will achieve both your short and long term objectives

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