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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10120
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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IF YOU PAY A NON-CORPORATE ENTITY LOCATED IN CANADA, ARE YOU

Customer Question

iF YOU PAY A NON-CORPORATE ENTITY LOCATED IN CANADA, ARE YOU REQUIRED TO ISSUE THEM A FORM 1099-MISC WHEN YOU PAY THEM IN EXCESS OF $ 1,000,00?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,No, there's no tax reporting (other than documenting your expenas via cancelled check/bank statement) or withholding as long as the person performs services IN Canada
Expert:  Lane replied 1 year ago.
That's becasue this is not US Source Income
Expert:  Lane replied 1 year ago.
What you should consider doing is having the indivual completela W-8Ben to document their foreign presence AND that they own the income and are subject to the US/Canada Tax Treaty, which says that they are taxed in their resident state.
They do not need a tax ID to do this.
You do not file but keep for your record, in the even of an audit to document that you do not need to withhold.
Let me know if you have questions..
Lane