US corporation, foreign expenses

MikeC · Post by **MikeC** » Fri Jul 07, 2006 11:42 am

Hi, I need advise on the US corp taxation, more detailed - US corp's foreign expenses.

I have a Canadian corp. I got a new job in US and was advised to open the US corp.

My brother is in Canada, he lost his job and is willing to assist me, taking over some of the work. He can work for my Canadian company and be paid by it.

Question 1. If I open a US corp - can I pay from my US corp to my Canadian corp the "subcontracting" fees?

Question 2. Certainly this will be expenses for the US corp and taxable in Canada income for the Canadian corp. How will I declare these foreign expenses for the US corp?

Question 3. Do I need to register in US my Canadian corp which in this case will be physically in Canada and will be under my brother's "management"?

I want my Canadian corp to be still in business, and of course reduce total taxes, making sure everything is legal.

Thank you!

ususer · Post by **ususer** » Wed Jul 19, 2006 11:05 am

I'd like to know this too. Subcontracting from US to Canada. Does anyone know?

MikeC · Post by **MikeC** » Mon Jul 24, 2006 2:01 pm

Hi all, one more question if anyone knows the answer.
For this new job the company wants to pay me less than we initially agreed,
but pay in parts: part on corp-to-corp, and other part on what they call "per-deem".
They say "per deem" means they cover my living expenses (food, shelter, etc) because I am a foreigner (Canadian on TN).
They say I will benefit from this by NOT paying tax on this "per-deem" part.
Can this be true? I never heard of this "per deem".
This is about 40K/year, I don't see how I can not to pay tax on it if they claim it to my name??
Under which type of income will I be declaring this amount?
Thank you

nelsona · Post by **nelsona** » Mon Jul 24, 2006 2:33 pm

"per diem" is a very common term and refers to a daily allowance for expenses, rather than submitting receipts.

Your accountant will be able to expalin this to you.

MikeC · Post by **MikeC** » Mon Jul 24, 2006 3:03 pm

Nelson, thank you, sorry for disturbing, problem that they do not give much time for decision, I have either to sign the contract with them or give up.

First they refuse to deel thru my Canadian corp (my first post), suggest to open a US corp, and now this "per deem"...

nelsona · Post by **nelsona** » Mon Jul 24, 2006 4:02 pm

Like I said, you need an accountant.