Cross-Border Tax — US to Canada

Your business is entering Canada. Maybe you're starting to sell to Canadian customers, opening a Canadian office, or building a relationship with a Canadian distributor. Maybe you have Canadian employees or contractors. However it's happening, once you have a meaningful Canadian presence, you have Canadian tax obligations — and the Canadian system is distinct enough from the US one that assuming they work the same way is where the first expensive mistakes get made.

The question of how a US business should structure its Canadian operations — branch versus subsidiary, treaty-protected sales presence versus registered Canadian entity — has significant financial consequences easier to manage proactively than to unwind later.

GST/HST registration requirements for non-resident businesses are frequently missed: a US business selling digital services or goods to Canadian consumers may have a GST/HST obligation regardless of whether it has a physical location in Canada. Part XIII withholding — the tax Canada applies to certain payments made to non-residents — applies to management fees, royalties, interest, and dividends flowing from Canada to the US, and the rates depend entirely on the treaty position being properly claimed.

We assess your Canadian tax exposure based on your actual Canadian activity and advise on the structure that makes the most sense: branch or subsidiary, the financial and tax implications of each, and the circumstances under which each is appropriate.

We determine whether you have a GST/HST registration obligation — and if so, which type applies — and handle the registration and ongoing filing. We analyze Part XIII withholding on payments from Canada to the US and ensure treaty-reduced rates are applied correctly.

We handle CRA registration, T2 returns for Canadian subsidiaries, non-resident withholding remittances, and CRA correspondence. We coordinate the Canadian filing position with your US filing to ensure nothing is double-taxed and nothing falls through the gap between two advisors who have never spoken — because at Bibeka, both sides are handled by the same person.