Corp-to-Corp in USA on TN

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Corp-to-Corp in USA on TN

Post by gravin123 »


I have offer from US client to be hired through prime vendor on hourly rate (initially for 6 months, but extendable). This prime vendor staffing company in USA which will pay me an agreed hourly rate.

I am Canadian citizen with Canadian Corp (Single Person). My plan is to work 4 days a week in Ohio, USA and 3 days back to Toronto in Canada, where my family lives (Spouse and Daughter) and I also own the property.

I want all money into my Canadian Corp so I can claim expenses, and want to pay Canadian taxes only, if possible as, my family is here. But the US Corporation doesn't want to make payment to Canadian corporation and option suggested by them is either share the US Corporation details or move with them on W2. I want to avoid the W2 path.

Q1 What options do I have? Is it advisable to open US C-Corporation (or LLC) as subsidiary of (or owned by) Canadian Corporation? Which will then be sending funds to Canadian Corporation? If so, which entity will be better for Tax Purposes.

Q2 If allowed to create US Corporation, who should be issuing the TN visa Letter in that case?

Objective is, I want to pay all taxes in Canada via Canadian Corporation and pay my personal income taxes in Canada, and keep exposure to US IRS to minimum possible, and want to tell IRS that I have closer ties to Canada and will pay taxes to CRA.

Appreciate your help.

Thanks in Advance.
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Re: Corp-to-Corp in USA on TN

Post by nelsona »

The rule of thumb is that the corp you use should be where you reside, otherwise you are going to pay an extra tax in the corps jurisdiction.
So if you are planning to live in Canada, make it a Cdn corp. The TN letter should show the sponsor as your CLIENT, and that the y will be paying CanCo for your services.
You may want to keep close tabs on the actual days you are in US, and try to limit it to less that 50% of the time (over any 365-day period, not just calendar year), otherwise you are exposing yourself to us taxes.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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