Canada is the United States’ leading trade partner, and in recent years the economies of these two countries have become increasingly integrated. Both countries have complex business environments, and trade is regulated by a combination of U.S. and Canadian tax laws, NAFTA and the U.S. Canada Tax Treaty.

The Tax Treaty between the two countries has a broad impact on individuals and corporations engaged in cross-border commercial activity. The Fifth Protocol amending the Tax Treaty introduced significant changes to many areas of cross-border tax, including:

• Tax Treatment for Different Legal Entities such as LLC's & Hybrid Entities
• Withholding tax rates (including Regulation 103 and regulation 105 waivers)
• Residency & Permanent Establishment for tax purposes 
• Taxation of Employee Stock Options

Recent years have also seen major developments in areas other than taxation. The U.S. dollar has fluctuated in value against the Canadian currency, and many businesses and investors have incurred losses because they did not properly hedge themselves against these currency fluctuations.

In short, a proper understanding of the two business and regulatory environments is a key success factor to entities conducting cross-border business between the U.S. and Canada.

To assist our clients in this area, UHY International has assembled the Canada-U.S. Tax Team (CUTT).  CUTT is a group  of experienced U.S. and Canadian tax professionals, who work closely with one another to guide businesses in their cross-border ventures.

 Areas of CUTT Expertise

Corporate

 Consideration of integrated tax minimization strategies and repatriation of profits

 Compliance with Federal, State & Provincial tax laws

 Payroll administration and year-end reporting requirements

 Analysis of available corporate tax incentives and government assistance

 Establishing an effective Canada U.S. transfer pricing policy

 Performing transfer pricing analysis

 Sale of a cross-border business

 Cross-border real estate ventures

 Sale of real estate and section 116 withholding issues

 Developing local business & banking contacts  

Personal

  Preparation of U.S. and Canadian personal income tax returns

  Analysis of the tax ramifications of a cross-border move

 Departure tax

 Expatriate tax planning and preparation  

Estates and Trusts

 Cross-border Trust and Estate planning and administration

 Tax planning to minimize exposure to U.S. Estate Taxes