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