I have scanned through many of the posts on this message board and found a wealth of very useful information. However, I was hoping someone might be able to help me with this more complicated scenario. Here are the major points:
• I am a Canadian citizen and resident
• I am the owner (100%) of a corporation in Canada which has been invoicing a number of U.S. companies for several years
• I am a partner (approx. 1/5th ownership) and officer of a newly created American C-corp
• I am to be remunerated for the work I have been doing for the C-corp, but how these funds will be disbursed has yet to be determined
• I currently travel to the U.S. about 5-8 days per month to conduct business related to the C-corp, but am capable of exclusively telecommuting if it will simplify and/or enhance my tax strategy
My questions are as follows:
1. Is it possible for me to invoice for consulting work (through the Canadian corporation) in this scenario to avoid having to go through the trouble of a creating a separate Canadian payroll?
2. If I must be treated as a Canadian employee, can my existing Canadian corporation fill the role of the “Canadian branch†(assuming that the costs associated with the necessary restructuring of the corporation would be less than creating, operating and filing for an entirely new one)?
3. Would I need to file U.S. taxes in either of these situations?
4. How would expenses incurred within the U.S. be handled in these situations?
Complicated cross-border tax scenario
Moderator: Jim Eiss