Corporations doing cross border business find that their market place has grown significantly.  However, so too has the complexity of the company’s income tax situation.

The tax concerns of the corporation range from general income tax to payroll and HR issues.  It is important to get a clear understanding of the issues that need to be addressed, because the penalties associated to non-compliance in Canada or the US can be significant.  A situation as simple as having an employee work or conclude contracts in the other jurisdiction can create a foreign tax compliance requirement.

Some of the concerns that need to be addressed are:

• Taxation    
  • Is my company taxable in the other country?
  • Do I need to file a provincial or state income tax return?
  • Should I incorporate? Where?
  • What’s the impact on transfer pricing?
  • Are tax deductions the same in both countries?
  • What’s a consolidated return?
  • Why do I owe tax in a state but not federally?
  • What is a single purpose corporation?
  • What tax identification numbers do I need?
  

• Payroll
  • Can I keep employees all on one payroll?
  • You mean the other country has payroll deductions?
  • Isn’t this income item non-taxable in the other country?
  • Is it possible to have one employee on two separate payrolls,
  ...reporting the same income?