Tag Archive for Canada-US Cross Border Tax Issues When Winding Up A Subsidiary

Canada-US Cross-Border Tax Issues When Winding-Up a Subsidiary

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Canadian corporations form US Subsidiaries, and US Corporations form Canadian Subsidiaries, all the time.

What are the cross-border tax implications when those subsidiaries are wound-up? This article will provide an overview of those implications.

Winding-up a US Subsidiary (“USco”) of a Canadian Corporation (“Canco”)

For US tax purposes, proceeds received on the wind-up of USco are generally not treated as a dividend, and hence no U.S. withholding tax should apply.

Rather, such amounts would generally represent proceeds from the shares which should Read more