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No, I am a USA citizen. The question here is whether Canada is requiring Canadian business or any business on the planet to withhold tax?
So is a USA business required under enforceable law to withhold any monies for providing services in Canada? Or does this withholding just apply to Canadian businesses hiring outside services?
Sorry I must be confusing you.
I am only speaking about taxes in Canada.
I am a USA citizen living in Nevada hired to speak in Canada.
Is the USA company obligated under the law to withhold Canadian taxes?
If a U.S. company has employees performing services in Canada, it may be seen to be carrying on business in Canada. This result does not require a physical plant or office location, but can occur simply by soliciting orders or offering services for sale through an agent or employee. If a Company is deemed to be carrying on business in Canada, there will be corporate tax reporting requirements and potentially Canadian taxation. Where filing requirements are not met, significant penalties may result even where no tax is owed to Canada. Registration, collection and reporting requirements may also be necessary in many circumstances for Canadian Goods and Services Tax (GST) and Harmonized Sales Tax (HST).
A U.S. company rendering services in Canada is subject to a 15% tax withholding on their invoices under Regulation 105 of The Income Tax Act (and an additional 9% under Quebec tax law if services are rendered in Quebec). The Canadian customer is required to withhold and remit the tax to the Canada Revenue Agency (CRA) as well as file Form T4A-NR to report this tax withholding. The withholding is not a final tax but rather a tax instalment against a potential tax liability in Canada.
Just to clarify this whole thread is really about one issue.
I'm hired as a performer to deliver a keynote speech in Canada. The company hiring me -- a speaker's agency --- is based the USA and has no offices in Canada.
The agency told me they must withhold 15% of my fee because of Canada law. They sent me these links:
http://www.cra-arc.gc.ca/E/pub/tg/rc4445/ and this one: http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rndr/rndr-eng.html
Is the speaker's agency wrong and they are not required to hold any of my fee?
Thank you again!
One more piece of information.
The company hiring me to speak through the agency is also based in the USA, not Canada. They are just having the event in Canada. So the USA client is paying the speaker's agency who is paying me.
A U.S. company will have payroll withholding and reporting obligations for both Canadian resident and non-resident employees, in relation to employment exercised in Canada, even if it does not have a deemed or actual PE in Canada. There is potential for significant penalties and interest charges if the company is not compliant with the tax withholding requirements.
However, if applied and approved by the Canada Revenue Agency in advance, a Regulation 102 waiver may be obtained for employees resident in the U.S. that will ultimately be exempt from Canadian tax under the Canada-U.S. tax treaty. This waiver would eliminate the need to withhold and remit payroll taxes in respect of their employment in Canada.
Hopefully this clarifies matters for you.
Is this requirement the same for a US company hiring me to speak in Canada?