What is a T1134 information return relating to controlled and not-controlled foreign affiliates?
If a Canadian corporation or individual has an interest in a foreign affiliate, whether controlled or not, it will need to complete a T1134 information return. The T1134 information return is broken into two forms, a summary and a supplement. A separate supplement must be filed for each foreign affiliate. Read More
Expats are America’s global front-line ambassadors. Everyday, their actions and attitudes help shape others’ perceptions of the U.S. and Americans.
They are also the 21st century pioneers, forging opportunities and lives away from our shores and in the wider world.
However far from the U.S. they venture though, they remain in the strange situation of having to file taxes twice, in the country where they live, as well as to the U.S. This is because the U.S. operates a citizenship based taxation system.
The Platform for Collaboration on Tax – a joint initiative of the IMF, OECD, UN and World Bank Group – is seeking public feedback on a draft toolkit designed to help developing countries tackle the complexities of taxing offshore indirect transfers of assets, a practice by which some multinational corporations try to minimise their tax liability. Read More
Americans move abroad for lots of different reasons, perhaps on a job posting, for a better quality of life, or to explore other cultures. Paying less tax is another factor that often influences their choice of destination.
Americans still have to file U.S. taxes on their worldwide income wherever in the world they live, and they may also find themselves paying tax in the country that they move to. Read More
At a recent hearing before the Subcommittee on Oversight of the Committee on Ways and Means, I was asked a seemingly simple question about what types of guidance taxpayers can rely on. Unfortunately, the answer is not simple at all.
Generally speaking, there are three buckets of tax guidance: Read More
How are holdbacks treated for tax purposes?
The construction industry has special tax rules relating to when the income is recognized for tax purposes.
A holdback amount on each invoice (i.e. 10% of the progress billing) is a typical billing method in the construction industry. The customer does not pay this amount until they have approved the work as 100% completed and without deficiencies. Read More
In a very recent decision (Maze v. IRS), the D.C. Circuit Court of Appeals upheld a lower court decision blocking several taxpayers’ efforts to leave the OVDP tax amnesty program and enter the friendlier IRS Streamlined program without utilizing the required transition rules.
The Maze case demonstrates the importance of choosing the IRS tax amnesty program that is right for you from the outset. Read More
Millions of Americans living abroad are working as freelancers. Some work mainly for one or more American firms, others freelance for foreign firms or provide services directly to small firms or individuals. Many are settled permanently in one foreign country, others are intending to return to the U.S. after a few years, or they may be Digital Nomads, roaming between Wi-Fi hotspots in different countries providing freelance services online. Read More
The United States is “making noises” about “tax reform”. Senator Orrin Hatch requested submissions from “stake holders” on what should be included in tax reform. He has clearly received (as did the Ways and Means Committee in 2013 and the Senate Finance Committee in 2015) many suggestions advocating the repeal of “citizenship-based taxation”.
As noted at a site compiling the submissions of those affected by U.S. extra-territorial taxation: Read More
Why is the United States imposing full U.S. taxation on the Canadian incomes of Canadian citizens living in Canada?
The Internal Revenue Code mandates that ALL “individuals”, EXCEPT “non-resident aliens”, are subject to full taxation, on their WORLDWIDE income, under the Internal Revenue Code. The word “individuals” includes U.S. citizens regardless of where they live and regardless of whether they are citizens and residents of other countries where they also pay tax. This means that, by its plain terms, the United States imposes full taxation on the citizens and residents of other nations, because they are also (according to U.S. definitions) U.S. citizens. The United States is the only country in the world that has a definition of “tax residency that mandates full taxation based ONLY on citizenship. Read More
Why should I be concerned about participating and non-participating shares in my company?
Shares in a corporation can be participating or non-participating, among other features. Participating shares are eligible to “participate” in the equity growth of the company and be permitted to receive dividends. Non-participating shares do not benefit from the equity growth of the company. This can potentially impact the valuation of shares. Read More
How do I determine if my new vehicle is a Class 10 or Class 10.1 asset and what are the tax implications?
Any vehicle with a purchase cost of over $30,000 can be classed as a luxury vehicle (a 10.1 asset). This classification restricts the amount of depreciation that can be deducted from income which reduces your corporate expenses and increases your corporate tax. It also limits the amount of GST that can be recovered. The determining factor is whether the vehicle is a passenger vehicle or a motor vehicle by CRA’s definitions. Read More
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