US Citizen Working In Canada

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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chrispy
Posts: 2
Joined: Mon May 28, 2018 9:33 pm

US Citizen Working In Canada

Post by chrispy »

In 2014 I started working in Canada stayed less than 183 days in Canada. I was working as a sole proprietor for a US company at their Canadian Branch and maintained a residence in the US. Should I be paying Canadian or US Income Tax for 2014?

In 2015 I was in Canada 190 days and worked as a sole proprietor for the Canadian Company and maintained my residence in the US. Should I be paying Canadian or US Income Tax for 2015?

In 2016 and 17, I was in Canada less than 183 days working for the Canadian Company as a sole proprietor and maintained my residence in the US. Should I be paying Canadian Income Tax for 2016 and 2017?

Thanks
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You should be paying Cdn tax on some of your Cdn income, during periods in which you spent 183 day in ANY 365 day period. It is not calendar year dependent.
Since you appear to have carefully tracked your days in Canada, you should be able to determine the period(s) during which you exceeded those limits.

IRS will credit you with ant Cdn/provincial tax you pay.

You are not required to report your world income to Canada, since you remained US resident
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
chrispy
Posts: 2
Joined: Mon May 28, 2018 9:33 pm

US Citizen Working In Canada and the 183 Day rule

Post by chrispy »

I have one accountant that told me that I would qualify to not pay taxes in Canada if I did not exceed the 183 day rule and that it did not matter if I was an individual contracting with a Canadian company or an employee of a US company that billed the Canadian company.


My current accounting firm say that I do have to pay taxes in Canada and the 183 day rule does not apply. They referenced this...

Regarding your question about tax exoneration for non-residents in Canada:
Yes, according US-Canada Tax treaty, article XV, non-resident may be exonerated for the taxes if he worked in Canada less than 183 days, however this applies only for the salaried employees and not to independent supplier of the services (self-employer).
Please see Article VII – Business Profits (attached file).


Who is right?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

And what does the business profits section say?
That income from that business is only taxable if it is from a permanent establishment
And the creation of a permanent establishment occurs if you spend 183 days in any 365 day period.

So, I guess they can't read.

Article V, paragraph 9 applies.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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