Now that the world is so interconnected, it is increasingly common for taxpayers to own assets, earn income and acquire residency in multiple countries. This means extra effort is required to ensure they comply with tax laws in their respective countries. With the assistance and backing of our partner firms, we provide various cross-border international tax planning and compliance services to both and as well as any related accounting.
Taxpayers we assist: , , , and
We can help with common situations needing close attention, such as:
Canadian non-resident who has income in Canada or owns Canadian real estate
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Canadian resident who has foreign income or owns foreign assets
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Citizen of the United States who lives in Canada
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A taxpayer contemplating a move to or from Canada
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According to Canada Revenue Agency, a resident of Canada has significant residential ties to Canada such as a home in Canada, a spouse in Canada, or dependents in Canada. Secondary residential ties can include personal property in Canada such as a car or furniture, social ties in Canada such as recreational memberships, economic ties in Canada such as Canadian bank accounts or credit cards, a Canadian driver’s licence, a Canadian passport, and health insurance with a Canadian province or territory. There is no single factor that determines residency status, so it isn’t always easy to know your status with absolute certainty. Canadian income tax is owed by Canadian residents on world-wide income.
A non-resident of Canada for tax purposes can be defined as a person, corporation or trust not having significant ties in Canada. There is no single factor that determines residency status, so it isn’t always easy to know your status with absolute certainty. Canadian income tax is generally assessed to non-residents only on their income earned (or considered to be earned) in Canada.
A corporation can be defined as a legal entity separate from its owners, formed for the purpose of conducting a business. Canadian corporations, also called “companies”, often enjoy lower income tax rates compared with sole proprietorships or partnerships. It is important for a corporation to use an accounting system to help with financial reporting, but it is equally important for that system to be able to help make decisions about the future of the business.
A sole proprietorship is a business formed with little to no formalities by a person where there is no legal distinction between the owner and business. Sole proprietorships are often home businesses, but not always. A partnership is similar to a sole proprietorship, except that there is more than one owner involved. Treatment of tax on income is different with a sole proprietorship or partnership compared with a corporation.
In common everyday language, an individual is usually considered to be a human person. However, in the eyes of tax law, an individual can be defined as a human person or an estate or trust. Business organizations (ie. corporations, estates, trusts, not-for-profits, sole proprietorships, partnerships, etc.) are ultimately controlled by human people, whether directly or indirectly. The question of “Who is the taxpayer in this situation” (ie. a human person or another entity) can be dependent on a number of factors.
An estate is the collection of all property and assets owned by a person, often at death, which are set to be distributed according to a legal document, typically the person’s will. A testamentary trust is formed when these property and assets are transferred to a third party (trustee) for the purpose of distributing them to the beneficiary(ies). For example: An investor passes away, leaving a portfolio of stocks and bonds behind. The trust is formed upon his death, and title to the portfolio is transferred to the trustee who will administer the portfolio for the benefit of the deceased’s children. A common question that arises is who gets taxed on the investment income earned after death – the deceased, the trust, the trustee, or the beneficiary(ies). Sometimes there is no estate when a person passes away, and sometimes there is no trust. These things can get tricky sometimes. There are also many types of inter-vivos trusts which are established during one’s lifetime.