When a person (whether a corporation or natural individual) crosses a border to perform services, Canada and the US have detailed taxing rules, aimed at ensuring that the person entering the other country properly reports those activities. These rules often come with mandatory “withholding taxes“ on the payer of the services resident in the country where the services are being performed.
Canada has recently fine-tuned its position on Regulation 105 withholding, which may come as a surprise to many involved in the cross-border provision of services.
Tagged in:
CRA Assessment
Cross-Border Services
Income Tax Act
Regulation 105 Withholding Tax
Subcontractors
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