My wife and I (100% owners of the Canadian corporation) moved to the US on E-1 owner/principal trader via in 2022 thus making our Canadian corporation a non-resident for Canadian tax purposes. However, business continues between our Canadian corporation (which we have to maintain for ever to adhere E-1 visa rules) and our US clients via sub-contractors working out of Canada. We do not work for our Canadian corporation.
Now, is our Canadian corporation considered a resident of the US for Canadian taxation purposes. If so, while filing the T2 tax return for our Canadian corporation with CRA as a non-resident, do I file schedule 20 - Branch Tax at all?
While filing 1120-F with IRS for our Canadian corporation (since we have a PE in the US due to us living in the US) can I elect for the US-Canada tax treaty provision [1.884-1(g)(4)(iv)B] to get a tax exemption of branch tax on the first CAD 500,000 (lifetime) of profit or reduce the branch tax from 30% to 10% even though our Canadian corporation is not a resident of Canada?
Can a non-resident Canadian corporation use US-Canada treaty provisions to reduce branch tax(1120-F) in the US
Moderator: Mark T Serbinski CA CPA