International Tax and US Tax Services
International tax issues can be complicated. Green Horwood & Co has earned a strong reputation for offering quality international tax, US tax and cross-border tax services. The scope of these services is broad, but includes:
Non-Residents owning Canadian Real Estate
Non-Canadians owning real estate in Canada have special Canadian tax and filing obligations requiring the services of an experienced professional. In addition to offering experienced advice in this area, we help our non-resident clients file elections to minimize their Canadian tax burdens, and assist them with appropriately filing required income tax returns.
We also assist non-residents wishing to sell Canadian real estate, by reducing their tax burdens by applying for clearance certificates.
Application of International Tax Treaties
Whether you are a Canadian resident doing business or investing outside of Canada or a non-resident doing business or investing within Canada, the domestic tax rules of each country often combine to create unfair "double tax" situations. Canada has international tax treaties with many countries. These treaties alleviate many unfair situations.
We can assist you in the interpretation of international tax treaty rules, which often require international tax expertise.
Canadian-US Cross Border Taxes
(Including US Personal and Corporate Income Taxes, and Estate Taxes for US Citizens Living in Canada)
American citizens who reside in Canada still need to file US tax returns annually. The penalties for non-compliance can be severe. We assist US citizens with their US filing requirements, helping provide them with peace of mind that their reporting is compliant with IRS rules.
Because we practice in the area of US and cross-border tax, we are often able to identify opportunities to minimize a client's overall tax burden.
Non-residents of the US may be required to obtain an Individual Taxpayer Identification Number (ITIN) before filing a US income tax return. As a registered IRS Acceptance Agent, we can assist clients with obtaining an ITIN.
Canadian residents owning rental property in the US are subject to US income taxes. Filing proper elections allows tax to be paid on net rental income, rather than on gross rental income. State income tax returns may also be required.
Non-residents who sell US real estate may be subject to significant withholding tax on the proceeds, and we can often assist in reducing or recovering this withholding tax.
Gifts of tangible properties located in the U.S. are subject to gift tax. Assets located in the U.S. may be subject to Estate taxes.
Non-Residents Immigrating to Canada
Under the Canadian tax system, all residents are taxed on their worldwide income including capital gains. However, there is a unique opportunity for immigrants to Canada who have accumulated significant investment assets. An immigrant can often establish an offshore trust before coming to Canada, with no Canadian tax on the trust assets for up to five years after becoming a Canadian resident. Our experienced advisors are well-versed in structuring immigration trusts.
We also can act as a valuable resource with other financial matters related to your move to Canada.
Non-Residents Investing or Working in Canada
Where a non-resident of Canada owns shares of Canadian companies, is a beneficiary of a Canadian trust, or receives passive income from Canada, that non-resident or the payer may have an obligation to pay or withhold Canadian tax.
Where non-Canadians carry on business in Canada, they will be subject to tax in Canada on their Canadian income. In many cases, the Canadian payer is required to withhold a certain percentage of the payment to the non-resident to be applied to the ultimate Canadian tax payable. In some cases, it may be possible to have the 'up front' withholding tax reduced.
Where non-residents of Canada work in Canada as employees, they will be subject to tax on a similar basis that Canadian resident employees are taxed.
We can assist you in determining the tax cost in becoming a Canadian resident, navigating the tax rules and filing the appropriate tax returns.
Canadians Leaving Canada (Departure Tax)
Canada levies tax based on an individual's residency rather than on an individual's citizenship. As a result, when a Canadian resident departs from Canada and ceases to be resident in Canada for tax purposes, income tax on many unrealized gains is triggered.
In cases where an emigrant has fairly complex financial affairs, this can create problems including cash flow problems if the individual has non-liquid assets. In some cases, we can assist in deferring this tax liability.
There are a number of complex factors someone contemplating leaving Canada must consider carefully, and taxes on such a move are often significant. We can provide insight in this area. Further, those leaving Canada are required to file special income tax returns in the year of departure, and we can competently prepare these departure returns.
Canadian Residents Investing Offshore
Canadian residents are required to report world income in their Canadian returns. Canadian residents therefore have to report income from sources outside of Canada.
Canadian residents owning shares of certain companies situated outside of Canada may be required to report the passive income of these companies. This is an area where specialized expertise is required.
Similar rules also tax Canadian residents on the income and capital gains earned by certain offshore investment vehicles. Our tax specialists have the appropriate international tax expertise to assist you in your planning and filing obligations, as well as a wide network of contacts with further international tax expertise where warranted.
Chartered Accountants
1006 Fort Street, Third Floor
Victoria, BC V8V 3K4