Cross-Border Corporate Tax Planning

We received a call from a U.S. certified public accountant who is a member of the accounting firm association we also belong to, CPA Associates International. He had a client who was contemplating expanding her business into Canada.

The first step was to have a conference call with this new client to understand her business, as well as what aspect of the business she planned to pursue in Canada. The client stated that if the business was to succeed in Canada it would require a physical office in the country. RMT outlined the main areas of Canadian taxation applicable to a foreign corporation with a physical office in Canada and provided an overview of the advantages and disadvantages of the three main legal entities that the client could operate under. We also provided the U.S. CPA with the applicable Canadian tax rates so that they could calculate the impact of the Canadian operations on the client’s U.S. taxes.

A month later we received a call from the U.S. CPA. The client now had enough information about the Canadian market and tax system to conclude that it was beneficial for her to expand into Canada. RMT outlined the next steps and introduced the client to a Canadian lawyer and payroll company. We also helped her register for all applicable taxes, ensured she was correctly applying sales taxes and taught her how to prepare her HST/GST returns.

A few weeks after the client’s year end, RMT sent her a customized memo outlining the information required to prepare the corporation’s income tax filings. We had another conference call with the client to discuss her accounting policies and how they would impact her Canadian income tax return. We then prepared and filed that return.

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