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I am an IT contractor, with a Canadian corporation with an opportunity to work in the U.S. on a Corp to Corp basis. I need to make sure I have the right paperwork and am setup correctly with the IRS. I want to avoid US Corp taxes by virtue of being treaty exempt and would like to review my situation.
Hi,
Your Canadian corporation will need a US EIN, and will also need to provide your American client with form W8-BEN-E to avoid a 30% US withholding tax on payments received by your Canadian corporation. I can prepare both for a fee of $300 CAD (one time) + disbursements and taxes.
In addition, your Canadian corporation will need to file a US Corporate Tax Return (1120F) along with a Treaty-Based Disclosure (form 8833), in order to claim an exemption from US corporate income taxes. Pursuant to the Canada-US tax treaty, your Canadian corporation is not liable for US corporate income taxes because it does not have a permanent establishment (fixed place of business) in the US. My fee to file the 1120F and form 8833 is $750 CAD / year + disbursements and taxes.
Finally, I can file your Canadian corporation's T2 Corporate Tax Return and HST Return with the CRA for an additional fee. Bookkeeping services are extra.