Cross Border Tax Consultants

If you are a U.S. person and shareholder of a Canadian corporation, especially Canadian controlled private corporation (CCPC) or professional corporation, you might be struggling around GILTI. What is GILTI? How is GILTI calculated? How to avoid GILTI? If you are having all these questions, you are not alone! Let’s simplify the GILTI for you. If you need a more detailed but simplified understanding of GILTI and how it affects the U.S. shareholders of Canadian corporations, read here . GILTI is a complex tax topic and ideally should be dealt by a cross border tax accountant in Toronto. However, you can avoid the GILTI altogether by one simple decision – Pay yourself Salary from your Canadian corporation! Yes, by paying yourself salary you can remove the earnings from the corporation. The income is reported as an employment income on your Canadian income tax return. Foreign tax credit against the income tax credits paid in Canada are available to apply against US income tax liabi...

  An LLC (limited liability company) is created under the state laws in the United States. Limited liability companies (LLC) offer its members liability protection while offering the benefits of being fiscally transparent. Fiscally transparent entity means that income is not taxes at LLC level, but it flows to its members and taxed at the personal level. The LLCs are America’s favorite business structure, so much so that, local accountants in the US tend to recommend to everyone. Sometimes, they recommend it to residents of other countries without knowing the income tax consequences on those taxpayers in their countries. Many Canadian taxpayers often go ahead an set up an LLC in the U.S. without knowing the serious income tax issues. An LLC is treated as a corporation in Canada whereas a flow through entity in the U.S. Since Canada does not see an LLC as a fiscally transparent entity and consider it a corporation, the income of LLC is not included in the personal income of its...