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U.S. – Canada
Cross-Border Tax

The tax systems in Canada and in the US are some of the most complicated in the world. Tax gets even more complex for individuals and companies who have tax filing obligations on both sides of the border. Think of this as a third system of tax that very few accountants in the world understand how to navigate effectively.

A sound corporate structure and individual tax planning help prevent double taxation and minimize global tax liabilities. Our service packages include expert advice on U.S. federal and state tax laws, ensuring clients make informed decisions and avoid costly consequences in this intricate area.

What is cross-border tax?

Cross-border tax refers to the taxation considerations and implications that arise when individuals, businesses, or investments operate across national borders. It involves navigating the complex web of tax laws and regulations in multiple countries, addressing issues such as income reporting, deductions, credits, and compliance requirements. US – Canada tax accountants are rare, and firms have cross-border tax specialists are hard to find.

Why would you need a cross-border tax accountant?

An individual or company with filing obligations in both Canada and the US needs the services of a cross-border tax accountant due to the complexities of tax laws in each country. These professionals specialize in navigating the intricacies of international tax codes, ensuring compliance with regulations in both jurisdictions and optimizing tax strategies to minimize liabilities. They can help with issues such as residency status, foreign income reporting, tax credits, and deductions, providing valuable expertise to avoid penalties and optimize tax efficiency across borders.

Are you an individual with filing obligations on both sides of the border? Find out how we can help here.

Are you a corporation that has operations or sales from Canada into the US, or vice versa? Find out how we can help here.

Achen Henderson CPAs cross-border tax team is your solution for your US – Canada cross-border tax accountant needs, such as:

  • Canadians with U.S. business activities and investments
  • Canadian investment in U.S. real property
  • Cross-border acquisitions and mergers
  • Cross-border estate and gift planning
  • Cross-border ownership strategies
  • Entity choices for cross-border investments

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Find out more about our cross-border tax services

Our accountants are experts at knowing what your tax obligations are on both sides of the Canadian – US border.  Cross-border tax compliance is complex tax because not only are returns often required in Canada and the US, but there are also specialized tax obligations that stem from the Canada-US tax treaty and international reporting forms in both Canada and the US. Canadian businesses doing business in the US, and Canadian residents who have ties to the US should hire a specialized cross-border CPA to understand all of their tax obligations. Here are the cross-border tax services that we offer:

Why Companies and Individuals chose Achen Henderson​

Our Cross-Border tax team is one of the best and most knowledgeable in the business. You get all the advantages of years of experience with a personal feel. 

I found Achen Henderson to be very ProfessionalCarol Sadler CPA, CA CPA TEP is an exceptional US Tax accountant and reviews the return before filing it to make certain all necessary forms are completed.Connie was amazing and kept me posted as to the progress of my documents.
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Shirley A Elder Avatar
Shirley A Elder
I am very happy to have had excellent service and fast results getting my taxes done. Highly recommend! Thankyou very much😊
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Donna Gapka Avatar
Donna Gapka
Carol Sadler is the best. Knowledgeable and in control. 100% reliable and a joy to work with.
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John Frangos Avatar
John Frangos


Cross-Border Tax FAQs

Does my Canadian company have to file corporate taxes in the US?

Our accountants are experts at knowing what your tax obligations are on both sides of the Canadian – US border. If you have started doing business with U.S. customers, you may be required to file a U.S. corporate tax return and pay U.S. taxes. You may also have additional information reporting requirements that carry penalties for non-compliance.

As a general rule, under the Canada – U.S. Tax Treaty, you are only subject to U.S. tax on the income from a “permanent establishment”—a fixed place of business in the U.S. or a project to which you regularly send employees to the U.S. to conduct business. See U.S. Corporate Tax Return for more details.

If you’re planning to do business in the U.S., advance planning is required to set up a proper tax-effective structure, including determining whether or when you may require a U.S. subsidiary or affiliate.

Do I have to file a personal tax return in the US?

To learn if you need to file a personal tax return in the US, please visit our personal tax page here.

If you have additional questions, please do not hesitate to reach out and we will set up a consultation with you to determine your tax compliance obligations.

What are U.S. Limited Liability Corporations (LLCs)?

U.S. Limited Liability Corporations (LLCs) are simple, flexible structures that are very effective for U.S. business activities. For U.S. tax purposes, LLC earnings may flow through to the LLC’s partners or owners, rather than being taxed in the entity.  

Your U.S. business partners may suggest an LLC as your business structure. However, Canada does not recognize the flow-through provisions of the LLC so your Canadian corporation could face double taxation on U.S. activities. We can set up a more effective corporate structure for these situations and mitigate the tax if an LLC is required.

What is the process of repatriation of funds from a U.S. corporation to a Canadian subsidiary, or vice versa?

A loan or transfer of funds from a U.S. corporation to a Canadian subsidiary, or from a Canadian corporation to a U.S. subsidiary, is subject to rules limiting the amount of interest that can be deducted.  Both Canada and the IRS impose reporting requirements governing the transfer of funds, and severe penalties may be imposed for non-compliance, especially by the IRS. Dividends to a parent company located in the other country are subject to withholding taxes, Canada’s foreign affiliate tax rules, and new U.S. laws introduced at the end of 2017. It is crucial to understand the applicable laws and get early advice in order to cost-effectively transfer funds.

Do I have to pay taxes in Canada if I have a business in another country?

If you are a resident of Canada for tax purposes, you are generally required to report and pay taxes on your worldwide income, including income from a business in another country. However, Canada has tax treaties with many countries to avoid double taxation, which means you might be able to claim a foreign tax credit for taxes paid in the other country. Additionally, the tax treatment of foreign income can depend on various factors, including the type of income, the country in which the business operates, and the specific provisions of the tax treaty between Canada and that country. 

What is a cross-border tax arrangement?

A cross-border tax arrangement refers to any situation where tax implications arise from activities or transactions that cross international borders. This can include scenarios where individuals or businesses earn income, hold assets, or engage in transactions that involve more than one country, leading to potential tax consequences in multiple jurisdictions.

Cross-border tax arrangements can be complex due to the interaction of different tax systems, treaties, and regulations across countries. They often require careful planning and consideration to ensure compliance with tax laws in each relevant jurisdiction and to optimize tax outcomes.

Examples of cross-border tax arrangements include:

  1. International business operations: When a company operates in multiple countries, it may be subject to tax laws in each country where it has a presence, leading to issues such as transfer pricing, withholding taxes, and the allocation of income and expenses across jurisdictions.

  2. International investments: Individuals or businesses investing in foreign assets or securities may face tax implications both in their home country and in the country where the investment is located, such as capital gains taxes, foreign tax credits, and reporting requirements.

  3. Expatriation and immigration: Individuals who move between countries may be subject to tax residency rules that determine their tax obligations in each country, as well as rules for the treatment of income earned abroad and foreign assets held.

  4. Cross-border transactions: Transactions involving the transfer of goods, services, or intellectual property across international borders can give rise to tax issues related to customs duties, value-added taxes (VAT), and other indirect taxes, as well as income taxes.

Does the CRA tax foreign income?

Yes, the Canada Revenue Agency (CRA) requires Canadian residents to report their worldwide income, including income earned from foreign sources. This means that if you are a resident of Canada for tax purposes, you are generally required to report and pay taxes on your income from all sources, both within Canada and abroad.

However, Canada has tax treaties with many countries to avoid double taxation, which means that you may be able to claim a foreign tax credit for taxes paid to another country on the same income. This helps prevent the same income from being taxed twice, once in Canada and once in a foreign country.

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