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Tag Archive for Foreign Corporation

Tax Patterns; Non Resident Individuals Or Foreign Corporation

Richard Lehman, Tax Advisor

As a general rule, nonresident alien individuals and foreign corporations are not subject to tax unless the income is “from a United States source”. There are different rules to determine when income is from a United States source.

Nonresident alien individuals are taxed differently than the United States taxpayers on passive income such as interest and dividends and royalties.

This pattern requires the foreign taxpayer to pay an amount on the gross income that is earned. Insofar as business income earned by the foreign taxpayers, they are taxed the same as United States taxpayers, except they will only be taxed on their United States source income. Read more

How Wealthy Immigrants To Canada Can Use A Holding Company To Create A Tax-Free “Pipeline”

There is a little-known method by which wealthy immigrants to Canada can use a holding company (“Holdco”), either in Canada or offshore, to receive, otherwise taxable, money tax-free in Canada.

This will be applicable in situations where that immigrant holds a significant interest in foreign a corporation (“Forco”), either alone, or with family members.

This technique will be even more attractive now that “immigrant trusts” will no longer be available as a tax planning tool for wealthy immigrants (see my blog posting A Sudden Death For The Canadian “Immigrant Trust”!). Read more

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