Canadian Income Tax Implications for U.S. Employees Working in Canada

Posted by Kevin Johns and Greg Schulte on June 7, 2016

Kevin Johns

Regulation 102 Regulation 102 of the Canadian Income Tax Act requires employers to withhold 15 percent tax (additional 9 percent if services are performed in Quebec) on any payments made to non-resident employees for services rendered in Canada. Subject to the provisions of the treaty between Canada and the U.S. there are certain conditions that would circumvent this withholding requirement. The conditions would allow for the U.S. employee to perform services in Canada and for the remuneration to only be taxable in the U.S. and not subject to Canadian income taxes. These circumstances are as follows (assuming a Regulation 102 …

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Kevin Johns, CPA

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