Tag Archive for 1040NR

Personal Services Provided In The United States

Individual contractors from Canada providing services in the U.S. in the capacity of self-employed individuals or utilizing their Canco should be aware that depending on the number of days present and percentage of U.S. gross business income, Article V, paragraph 9 of the Canada/U.S. Tax Treaty may deem them or Canco to have a permanent establishment in the United States. This stems from the 2007 Protocol that in this respect was effective commencing in 2010.
Since 2010, this means that income will be subject to U.S. taxation requiring the filing of U.S. federal and possibly State returns, however foreign tax credit is available on the Canadian tax return.

Previously, independents had to demonstrate that they were not carrying on business in the U.S. through a Read More

Written by | Posted in Canada • Individual • Tax Tips

Canadians Selling or Providing Services to the United States

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 Read More

Written by | Posted in Tax Provision/Tax Reporting