Canadian working remote for US company - US taxes??

oblongit · Post by **oblongit** » Tue Mar 19, 2013 2:40 pm

I'm hoping someone can help:

-I am Canadian and have been approached by a US company to help them sell software, so it would be a Services contract.
-I have a sole proprietorship, I would be working for them as an independent contractor
-They don't have a company registered in Canada and need to pay me in US$
-All work will be done remote but I may visit the US office for meetings, tradeshows, etc - not to work.
-Everything I have read says that since I'm a Canadian resident I only need to worry about filing taxes here, I've also discussed this with the CRA and they've confirmed that.

BUT this company is now saying they can't go through with the contract unless I acquire an EIN # and file W8-Ben for tax witholding - and they're willing to put through the EIN paperwork for me (which I've heard is not that hard).
I personally would like to avoid US paperwork/taxes/witholdings, etc. and am starting to take a step back from this contract. Are they right in saying that I require an EIN?

ND · Post by ND » Tue Mar 19, 2013 2:59 pm

They are right, as for their withholding requirements and exemptions they must establish you as a foreign person with Cdn sourced income therefore not subject to FDAP w/h and to do so need from you W-8BEN and EIN.

Good news is that you'll be able to meet your goal "I personally would like to avoid US paperwork/taxes/witholdings, etc" as after that that one step (which they are taking for you) you are completely done.

oblongit · Post by **oblongit** » Wed Mar 20, 2013 5:58 pm

Ok, thank you!