What Happens to My Canadian Corporation (CCPC) When I Move to the US?

The company stays Canadian. What changes is status, on two dates rather than one. In Canada it stops being a CCPC the day you cease residence, as control passes to a non-resident. In the US it becomes a controlled foreign corporation, you its US shareholder, the day you become a US person.

Does my Canadian corporation stop being a CCPC when I move to the US?

Yes, on the day you stop being a Canadian resident, assuming you control it. Section 125(7) of the Income Tax Act carves out any corporation controlled, directly or indirectly in any manner whatever, by non-resident persons. Once you’re non-resident, that’s you: nothing to file, no CRA discretion.

Under section 128.1(4)(b) your shares are deemed sold at fair market value the same day, unless paragraph (b)(iv) applies: 60 months or less of Canadian residence in the previous 120, and you owned them on arrival. The departure guide carries that math.

Does the corporation move with me, or does it stay Canadian?

It stays. A corporation incorporated in Canada after April 26, 1965 is deemed resident here throughout the year (section 250(4)), so moving yourself or the directors doesn’t change it.

Even in a dual claim, Article IV(3) returns it to where it was created, and the US treats a company made outside the US as foreign wherever run (IRC 7701(a)(4) and (a)(5)).

What if I move the management?

Moving the management is more likely to create a US permanent establishment than avoid tax. Treaty Article V(2) names a place of management first, ahead of a branch or office. A foreign corporation with a US trade or business is taxed on its effectively connected income (IRC 882(a)), plus a branch profits tax (IRC 884(a)). The treaty holds both to permanent-establishment profits (Article VII, Article X(6)) and caps the branch tax at 5% after a cumulative CAD $500,000, so you owe neither only where there’s no permanent establishment, and moving the management creates one. It’s a treaty position either way, on an 1120-F with Form 8833.

These limits are treaty benefits, running through the limitation on benefits article (Article XXIX A): the company gets them only as a qualifying person or on the active-trade-or-business test, which an operating company usually meets and a pure holding company can miss. Your own dividend rate is safe, since a natural person is always a qualifying person.

What changes on the Canadian side the day CCPC status goes?

The small business deduction goes, and that’s the expensive part. A CCPC gets a 19% reduction under section 125(1) and (1.1) on active business income up to a $500,000 limit (section 125(2)); without the status it takes the 13% general rate reduction in section 123.4 instead.

Both sit against the 38% basic federal rate in section 123(1), less the 10% abatement in section 124(1) for income earned in a province. Provincial rates land on top.

Federal rate on active business income	CCPC	Not a CCPC
38% basic, less the 10% abatement, less the deduction or the reduction	38 - 10 - 19 = 9%	38 - 10 - 13 = 15%

Losing the status also ends the taxation year (section 249(3.1)), so a mid-year move means two T2s. The first is still a CCPC year, so section 125(5)(b) prorates its business limit by days over 365 whenever it runs under 51 weeks. The second gets none, since section 125(1) gives the deduction only to a corporation that was a CCPC throughout the year. The enhanced SR&ED credit goes with the status, under section 127(10.1).

Columns assume you weren’t already a US citizen or green-card holder.

What it is	Before the move	After the move	Source
CCPC status	Held	Gone	ITA 125(7)(a)
Federal rate relief	19% small business deduction on up to $500,000, one limit shared across associated corporations, so 9% federal	13% general rate reduction, so 15% federal	ITA 125(1), (1.1), (2), 123.4, 123(1), 124(1)
Enhanced SR&ED credit	Available	Gone	ITA 127(10.1)
Taxation year	Runs to its normal year end; a short pre-change stub prorates the $500,000 limit by days over 365	Deemed to end before the change, and the new year gets no business limit at all	ITA 249(3.1), 125(5)(b), 125(1)
Corporation’s residence	Canada	Still Canada	ITA 250(4)
Dividends to you	No Part XIII, Canada’s withholding tax on payments to non-residents	25%, reducible to 15% under the treaty	ITA 212(2), treaty Article X(2)(b)
US information return	None	Form 5471	5471 instructions
US current tax	None	Subpart F, plus net CFC tested income	IRC 951(a)(1)(A), 951A
Check the box	n/a	Not available to a Canadian Inc.	Treas. Reg. 301.7701-2(b)(8)(i), 301.7701-3(a)

What does my Canadian corporation become on the US side once I arrive?

A controlled foreign corporation, with you as its US shareholder, from the day you become a US person. You’re a US shareholder at 10% or more of the vote or value (IRC 951(b)), and it’s a CFC once US shareholders hold more than 50% on any day in its taxable year (IRC 957(a)). That status runs the whole taxable year, but the inclusion doesn’t: under IRC 951(a)(2), applied to tested income by 951A(c), you pick up only the part of the year you were both a shareholder and it a CFC.

Which 5471 categories, and what do they cost?

CFC status puts Form 5471 on your return under more than one category in the move year.

Missing them costs $10,000 each: IRC 6679(a)(1) for the Category 3 (section 6046) filing, unless there’s reasonable cause, and IRC 6038(b)(1) per accounting period for 4 and 5. Both add $10,000 per 30 days once the failure runs more than 90 days past the IRS notice, up to $50,000.

Do I pay US tax before any cash comes out?

Subpart F puts certain CFC income on your return before any cash moves (IRC 951(a)(1)(A)), and IRC 951A picks up net CFC tested income, the GILTI inclusion, renamed for tax years beginning after December 31, 2025 (PL 119-21 section 70323(c)). The IRS still labels it global intangible low-taxed income on Form 8992. You can elect under IRC 962 for corporate rates, which opens section 960 deemed-paid credits for the Canadian tax already paid.

See the year-one filing stack on an E-2 and the catch-up path for missed 5471s.

Can I just check the box on my Canadian corporation to make this simpler?

No, and it’s the most common wrong first move. The election is open only to an eligible entity, which Treas. Reg. 301.7701-3(a) defines as one not already a corporation under the per se rules. Canada’s entry on that list reads “Corporation and Company” (Treas. Reg. 301.7701-2(b)(8)(i)), so a standard Inc. is one.

The exception is the unlimited liability company: a Nova Scotia ULC, or any whose owners all carry unlimited liability under federal or provincial law. If yours isn’t one, there’s no box. Stayed in Canada and set up a US LLC instead? Here’s why that’s usually a tax trap.

Do I still file a T1134 for my Canadian company after I move?

Not once you’re a non-resident, though the move year still catches you. A reporting entity under section 233.4(1) is a taxpayer resident in Canada with a foreign affiliate at any time in the year, so if you were resident for part of it and held one, you owe a T1134. Your Canadian company itself is never a foreign affiliate.

After that it’s the corporation’s return. It holds the US entity you set up as one once it owns 1%, or 10% counting related parties (section 95(1)), files 10 months after year end (233.4(4)), and runs $25 a day to a $2,500 maximum if late (section 162(7)).

What does this look like end to end for one owner?

It splits by date. The deemed year end when CCPC status goes puts a mid-year move on two T2s, a stub and a new year, and the corporation files a T1134 once it holds a foreign affiliate. Becoming a US person while holding 10% or more adds Form 5471 in the move year, and control above 50% keeps it coming every year after. Form 8992 follows a net CFC tested income inclusion.

Form	Country	Who files	Trigger	When
T2, stub and new year	Canada	The corporation	Deemed year end, ITA 249(3.1); stub’s limit prorated under ITA 125(5)(b), nil for the new year under ITA 125(1)	Each period’s deadline
Form 5471, Category 3	US	You	Becoming a US person while holding 10% or more	Move year, with your US return
Form 5471, Category 4	US	You	Control above 50% during the accounting period. Category 5 also fits, but the instructions say to check only Category 4 where both do	Move year and every year after
Form 8992	US	You	A net CFC tested income inclusion	With your US return
T1134	Canada	The corporation	It holds a foreign affiliate, ITA 233.4(1)	Within 10 months of year end

Should I keep the Canadian corporation or wind it up?

Both cost. Keeping it runs the T2s, 5471s and T1134 every year without the small business deduction; winding it up stops those, but property paid out on a wind-up is a deemed dividend under section 84(2) beyond paid-up capital, back into Part XIII for a non-resident. That’s its own decision, worked through in the guide on winding up before you go. The leaving-Canada checklist, in date order covers the personal side.

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.