Permanent Establishment criteria

[alan8877990]

Hi,

I am working in Seattle on TN for providing IT consulting services through my Canadian Corporation. I have Washington state business license (as foreign company). I am aware of the 183 days of physical presence test. I am renting an apartment while consulting at the client site since hotels are much more expensive. My family resides in Canada and all other ties are closer to Canada.

My question is -- by renting an apartment am I treated as setting up "Permanent Establishment" ?

Thanks in advance.

[nelsona]

No. The PE would be an office or shop. Your PE concerns will be time spent in US, which should be leass than 183 days in ANY 365-day period, not just calendar year.

[frank1867]

I have a very similar situation to this. If I set up an office, does this override the 183 day rule? In other words, if I set-up an office and I’m in the US less than 183 days, will I be taxed on this income in the US or do I still have to spend more than 183 days in the office to be taxed? Thanks.

[nelsona]

Yes, the office overrides this. You IMMEDIATELY have a PE (that would seem obvious).

[frank1867]

Ok thank you! Obvious to you maybe, I don't understand this situation too good lol I tried researching it on my own, but I’m not really sure what was credible and what was not. I’m glad I found this forum.

What if I purchase a home in the US (while keeping ties to Canada – my wife and kids still live there) and use a portion of the house as my office; would this count as a PE? Also, is there a certain income threshold I have to get over before I start paying tax (like there appears to be for wages) or am I taxed from the first dollar? Sounds like from your previous post that I’m taxed right away regardless of how much I earn? Thank you for taking the time to help me.

[nelsona]

I'll let you decide:
http://www.radiusworldwide.com/knowledg ... ishment-pe