Operating a business in US

Jessica · Post by **Jessica** » Thu Aug 18, 2016 3:16 pm

Is it true that Canadian corporation/sole-proprietor can conduct a business in US without any tax consequences due to the "Tax Treaty"?

nelsona · Post by **nelsona** » Thu Aug 18, 2016 3:39 pm

As long as that business has (a) no physical assets in US -- that would rule out rental property -- and (b) you don't spend more than 1/2 of your time there.

Jessica · Post by **Jessica** » Thu Aug 18, 2016 3:43 pm

Thank you for the quick reply. Just one more clarification: there will be a need to file taxes both in the US and in Canada, correct?

nelsona · Post by **nelsona** » Thu Aug 18, 2016 3:48 pm

That depends. You can "conduct business" in US and usually avoid US reporting.
However if you "conduct A business", that is run a business based in US, then obviously you need to file in US.

I would suggest a comprehensive evaluation of your plans done by a tax lawyer/accountant familiar with both US tax and imgration rules, rather than asking vague question with no background being given.

ND · Post by ND » Thu Aug 18, 2016 6:21 pm

There are still numerous scenarios that could trigger a US income tax filing requirement even where " that business has (a) no physical assets in US -- that would rule out rental property -- and (b) you don't spend more than 1/2 of your time there.", so I would suggest that you don't rely on that criteria alone.

nelsona · Post by **nelsona** » Thu Aug 18, 2016 9:08 pm

ND, while we are into quotes, I prefer this one:
I would suggest a comprehensive evaluation of your plans done by a tax lawyer/accountant familiar with both US tax and imgration rules, rather than asking vague question with no background being given.

Sometimes, the quality of the question governs the quality of the reply.

But, in general, that is what the treaty does indeed say, for Business income.