Question about U.S. employer paying Canadian consultant

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oakweather
Posts: 15
Joined: Thu Oct 15, 2020 1:00 pm

Question about U.S. employer paying Canadian consultant

Post by oakweather »

My employer, a Delaware C corporation, has no Canadian payroll, branch, or presence.

The Delaware Corporation would like to engage a consultant who lives in British Columbia and will be conducting the work in BC (outside of the U.S.). We received contradictory advice.

We were advised by someone that we need to report the earnings on a T4/T4A slip to the CRA.

We were, on the other hand, advised by someone else that we needed to do the following:
a) Collect W-8BEN from the consultant
b) Then issue neither 1099-NEC nor T4A (no tax forms at all)
c) It is up to the consultant to report the income net of expenses in his/her jurisdiction (in this case BC/Canada)

Please advise. Many thanks!
nelsona
Posts: 16947
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Question about U.S. employer paying Canadian consultant

Post by nelsona »

If you pay the person as a consultant, and not an employee, you have no filing responsibilities in canada. That is left to the consultant. The consultant shpuld have no tax obligations in US either.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
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