Would like to get advice on the following situation:
We are a small US-based LLC doing a consulting project in Canada. We will likely be paid $50K of fees for this project, but could go up to $100K. We will do maybe 10 days total work in Canada, so I'm pretty sure we wouldn't be considered to have a permanent establishment in Canada.
Our client has advised us that we need to submit a waiver to avoid 15% withholding of their fee. It looks like normally this is pretty straightforward (just fill out the form R105 waiver request) but I understand that things are more complicated with an LLC. Furthermore, we did some work for this client in Canada last year, did not get a waiver, and the client did not withhold 15%.
Questions:
- Is the best here approach to simply complete the treaty waiver, or is our situation more complicated?
- Will we have to to file a Canadian tax return for 2016 or 2017? Does getting the waiver impact this?
- Is this situation complicated enough that we should set up a consultation?
US LLC with project in Canada
Moderator: Mark T Serbinski CA CPA