Canadians with US LLCs and US persons with Canadian corporations: Form 5471, the CFC rules, FAPI, transfer pricing, nexus, choosing a structure, and contractors working across the border.
36 guides, each written by a CPA licensed in the US and Canada.
Yes. A Canadian can own a US corporation, LLC or branch. The vehicle sets your tax: a C corporation usually beats an LLC for a Canadian resident, and owning isn't a work permit.
Cross-BorderUsually not. Canadian Corporations and Companies are treated as corporations for US tax, so Form 8832 is closed to them.
Cross-BorderCanada's corporate integration system is designed so that income earned through a CCPC is taxed at roughly the same rate as income earned personally.
Cross-BorderA Canadian starting or buying a business in the US faces a set of decisions that are different from those facing a US domestic entrepreneur.
Canadian TaxCCPC status unlocks the small business deduction (9% on the first $500,000), the lifetime capital gains exemption, and refundable tax on investment income.
Cross-BorderCanada and the US use different tests to classify workers. Misclassification across the border creates liability in both countries.
Cross-BorderA cross-border business must choose between an LLC, a corporation, and a branch. Each produces different tax consequences in Canada and the US.
Cross-BorderYes, if you're a US person who controls it or owns 10% of it while US owners hold over 50%. A decision table by situation, what missing it costs, and how to catch up.
Cross-BorderYes if you're resident in Canada and a US corporation is your foreign affiliate: 1% yourself, 10% across related persons, 10 months after year end.
Cross-BorderUS businesses do not issue a 1099 to Canadian contractors who provide a W-8BEN. The W-8BEN claims the treaty exemption and eliminates US withholding.
Cross-BorderCanada's version of an EIN is the CRA business number (BN). A Canadian company that needs a US EIN files Form SS-4 by phone, fax or mail, pays no fee, and can get it on the call.
Cross-BorderA Canadian corporation files Form 1120-F for any year it runs a US trade or business, even one the treaty exempts. File on time or lose deductions. Dates and forms here.
Cross-BorderA US person who controls or owns 10% of a Canadian corporation generally files Form 5471 with their return. The five categories, schedules, $10,000 penalty and open statute.
Cross-BorderFrom 2026, GILTI is net CFC tested income: no QBAI carve-out, a 40% deduction and a 90% credit. A CCPC at the small business rate usually fails the high-tax test.
Cross-BorderWithout a W-8BEN, your US client must withhold 30% of what they pay you. With one claiming the treaty rate, withholding drops to 0%.
Cross-BorderA Canadian resident who forms a US LLC is taxed on the LLC's income in Canada at personal rates, gets no corporate deferral, and may owe US tax too.
Cross-BorderUsually yes, because the two countries disagree about what your LLC is. The IRS ignores it and taxes you personally as the profit is earned.
Canadian TaxCanada has no LLC. You choose a sole proprietorship, partnership or corporation, or a ULC in Alberta, BC or Nova Scotia. How each is taxed in Canada and the US.
Cross-BorderIf your spouse owns 10% or more of a Canadian corporation, IRC 958(b) attributes those shares to you, making it a CFC. Covers treaty provisions, foreign.
Cross-BorderHow Canada's refundable dividend tax on hand system interacts with US tax rules for Americans owning CCPCs, including CFC, GILTI.
Cross-BorderCanadian payers must withhold 15% of gross payments to US contractors under Regulation 105. A treaty-based waiver can reduce or eliminate the withholding.
Cross-BorderHow the qualified business income deduction works when you have a Canadian business, foreign income, or cross-border rental.
Cross-BorderSection 85 of the Income Tax Act lets a Canadian taxpayer transfer property to a Canadian corporation on a tax-deferred basis.
Cross-BorderA Section 962 election lets a US individual pay the 21% corporate rate on CFC income and claim indirect foreign tax credits for Canadian corporate tax.
Cross-BorderA Canadian freelancer working from home for US clients usually owes Canadian tax and CPP, not US tax. How the treaty, the W-8BEN and the totalization agreement apply.
Cross-BorderA share sale, asset sale, or earn-out each produce different tax results in Canada and the US. Treaty credits limit but do not eliminate double tax.
Cross-BorderSubpart F taxes passive and mobile income of a CFC directly to US shareholders, even without a distribution. interest. Covers treaty provisions, foreign.
Cross-BorderA Canadian who owns a single-member US LLC can face double taxation, because Canada treats the LLC as a corporation while the US taxes its income on the owner's return.
Cross-BorderWhen related companies in Canada and the US transact with each other, both countries require arm's-length pricing. Covers treaty provisions, foreign tax.
Cross-BorderIf your Canadian and US companies do business with each other, the prices you charge between them must be arm's length. Covers treaty provisions, foreign.
Cross-BorderA small business operating in both Canada and the US through related entities must price intercompany transactions at arm's length.
Cross-BorderUS flow-through entities (S-Corps and partnerships) pass their income to the owners' personal returns. For a US-resident owner.
Cross-BorderA Canadian company expanding to the US chooses between a subsidiary and a branch. The tax, liability, and loss-utilization differences are significant.
Cross-BorderIndividuals sign the W-8BEN, Canadian corporations sign the W-8BEN-E, and only US persons sign a W-9. What each form claims and what a wrong form costs.
Cross-BorderA Canadian corporation gives Form W-8BEN-E to each US payer to claim treaty rates. Line by line: Part I, active NFFE status, the Part III treaty claim and the LOB test.
Cross-BorderA Canadian business creates US tax nexus when it earns income that is effectively connected with a US trade or business.