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.
32 guides, each written by a CPA licensed in the US and Canada.
Usually 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-BorderProbably, yes. If you're a US person (citizen, green card holder, or US tax resident) and you own at least 10% of a Canadian corporation or control it.
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-BorderAn Employer Identification Number (EIN) is a nine-digit US federal tax identification number issued by the IRS to businesses, trusts, estates.
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-BorderPublic Law 119-21 renamed GILTI to net CFC tested income in July 2025, but the mechanics stayed the same. Canadian corps still trigger the US inclusion.
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.
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-BorderSelf-employment income is taxed in the country where the work is performed, not where the client is located. not US tax.
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 resident who owns a single-member US LLC faces potential double taxation.
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-BorderA US person who owns more than 50% of a Canadian corporation faces controlled foreign corporation rules, GILTI inclusion, Subpart F income.
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-BorderA Canadian corporation receiving US-source payments (dividends, royalties, service fees) files Form W-8BEN-E to claim treaty-reduced withholding rates.
Cross-BorderA Canadian business creates US tax nexus when it earns income that is effectively connected with a US trade or business.