Basically my question is what's required for my future Canadian corporation to bill a US company and get payment from them? Also, what tax paperwork would be required for the US client to produce, I guess a 1099?
I'm soon coming back to Canada (Ontario), I used to work for a US company under H-1B for 4 years and will continue to work for them remotely with a few visits a year as a contractor. The only way I can contract to my employer is to go through their preferred staffing vendor. Right now, everybody thinks I need to contract through the Canadian branch of that staffing agency. Which would involve charging Can taxes (HST). I'm trying to demonstrate that I could direclty bill the US branch instead and not charge the HST. It also wouldn't involve me creating any entity in the US. Basically, I'm billing a US firm and the US firm pays a canadian corporation, as simple as that. Can someone confirm this is going to be working?
canadian corp billing american client
Moderator: Mark T Serbinski CA CPA
If your CND corp bill a US client for services with a US address it is considered taxable for HST at the rate of zero, ( Zero rated ) so even though you charge no tax on Export services you are still required to register for HST. Be advised this income is not eligible for the small business deduction and will be tax at full corporate rates in Ontario of 28% instead of 15%
JG