Covers Canada–US treaty PE tests, US LLC treaty eligibility and Form NR303, branch tax calculations, Regulation 105 and T106 reporting, with an integrated case study.
Foreign companies often assume that without a Canadian office or subsidiary they have nothing to worry about in Canada. In practice, an installation project that runs past twelve months, staff who spend enough days on Canadian sites, a remote employee with authority to close deals, or a US LLC that can’t prove its members’ treaty eligibility can all create Canadian tax exposure and filing obligations. In this course, a tax director specializing in international inbound and outbound tax at a Toronto accounting firm walks through the full income tax analysis for non-residents carrying on business in Canada.
The session starts with Canada’s domestic framework. It explains why non-residents are taxed only on Canadian-source income, and how to decide whether a business is being carried on in Canada. This covers the common law factors courts consider, such as where contracts are made, where services are performed and who has authority to negotiate, as well as the deeming rules in section 253 of the Income Tax Act. It then turns to tax treaties, with a focus on the Canada–US treaty. It covers each way a permanent establishment can arise: a fixed place of business, a construction or installation project, a dependent agent, and the service PE tests based on days spent in Canada. It also looks at how the OECD Multilateral Instrument changes some treaties but not the Canada–US treaty, and at real CRA positions on remote employees, independent agents and subcontracted services.
Once a permanent establishment exists, the focus moves to what is actually owed. The speaker explains how to attribute revenue and expenses to a Canadian branch in a way the CRA will accept. He shows how Part XIV branch tax works and how the investment allowance can reduce it, with a worked example of the treaty’s 5% rate and $500,000 exemption, and why US LLCs may only get partial treaty benefits. He also covers which T2 return and schedules apply in each case. Related obligations that are often missed are covered as well: Regulation 105 withholding on services, payroll withholding for non-resident employees, Part XIII withholding, dispositions of taxable Canadian property and T106 reporting. The session ends with an integrated case study, a ten-step compliance roadmap and answers to participants’ real-world questions.
1 activity • 1 videos • duration: 54m
AJAG Professional Development was founded in 2003 with a mission of making professional development easier and more cost-effective for Canadian accountants and other financial advisory professionals. Our comprehensive range of flexible and reasonably-priced courses, programs and seminars are delivered online and in classroom-style settings in the Greater Toronto Area (Toronto, Oakville and Markham). AJAG features a roster of highly-qualified instructors who deliver content that is pertinent, up-to-date and engaging.
Senior Manager, Tax at McGovern Hurley LLP
Jesse brings nearly a decade of experience practicing Canadian and International taxation and specializes in providing tax advisory services to a broad client base. In addition to his Canadian tax focus, Jesse has a strong background in U.S. taxation, developed over nearly four years on MNP LLP’s dedicated U.S. tax team prior to joining McGovern Hurley LLP in 2021. Clients value Jesse’s clear, practical approach and his ability to translate complex tax rules into straightforward, actionable strategies that minimize risk and optimize outcomes. His genuine passion for taxation is evident in every engagement, bringing infectious energy, curiosity, and a relentless drive to deliver the best possible result for every client.
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