a question for corporation

[linghc]

Hi,

1) Can a Canadian corporation pay non-resident (for example, partner or
friends in China) contract/labor fee or bonus?

2) if Yes for 1), can I claim all fee/bonus to non-resident as expense
for the corporation?

3) if Yes for 1), how the non-resident pay personal income tax? the
answer may be "don't pay income tax to Canada".

thank in advance

[ChinaSmileJoe]

yes. but I don't know how much you may pay, is there any limits for total paid money?

[Knowledge_IS_Power]

You can pay a non-resident commission or salary.

If you pay salary or dividend, by law you should withhold 25% federal income tax. Province may have similiar requirement.

[呵呵]

作者: linghc

1) Can a Canadian corporation pay non-resident (for example, partner or
friends in China) contract/labor fee or bonus?

Yes for sure.

作者: linghc

2) if Yes for 1), can I claim all fee/bonus to non-resident as expense
for the corporation?

As Joe said, there might be some rules about this, ask your accountant to make sure.

作者: linghc

3) if Yes for 1), how the non-resident pay personal income tax? the
answer may be "don't pay income tax to Canada".

Sure, they don't pay income tax to Canada, but to the country where they live.

[呵呵]

作者: Knowledge_IS_Power

If you pay salary or dividend, by law you should withhold 25% federal income tax. Province may have similiar requirement.

Can you give a link about this.
Thanks.

[bank]

印象中是这样：

１。可以，但是非加拿大居民先扣下重税，３３％？
２。可以。
３。先交加拿大税。至于中国还要不要再加税，那是中国的事。

[Knowledge_IS_Power]

作者: 呵呵

Can you give a link about this.
Thanks.

Do not take for granted. Every government is a money sucker. In US,non-resident rate is 30%.

http://www.cra-arc.gc.ca/tax/nonresi...elines1-e.html

------------------------------------------------------------------------
Under the Canadian Income Tax Act (the Act), a non-resident is subject to tax on income earned in Canada whether they are providing:

"independent" or self-employed services (Regulation 105); or
services in an employment capacity (Regulation 102);
to an employer who is either a resident or a non-resident of Canada.

Under Regulation 105, any person paying a non-resident a fee, commission or other amount for "independent" services provided in Canada, is liable to withhold tax at 15% of the gross payment. The person must remit this amount by the 15th day of the month following the month in which the amounts were deducted or withheld. Failure to deduct or remit an amount under Regulation 105 makes the payor liable for the outstanding amount, plus interest and penalty.

Under Regulation 102 payments made to non-residents who provide employment services in Canada, are subject to the same deducting, withholding, and remitting requirements as those for resident employers. These amounts are subject to tax deductions at graduated rates and may be required to be remitted on an accelerated basis, depending on the source deduction history of the employer.

Non-residents providing "independent" services and those providing "employment" services may request a waiver or reduction of normal withholding if they can demonstrate that the withholding may cause them "undue hardship." For Regulation 105, a non-resident may apply by way of tax treaty protection, or based on an estimate of income versus expenses related to their services provided in Canada. For Regulation 102, only tax treaty protection may be sought.

[呵呵]

楼上两位可不可以澄清一下,这个"non-resident"是居住在加拿大,还是不居住在加拿大.
居住在加拿大的non-resident,在加拿大赚了加拿大的钱,要向加拿大缴税,可以理解.但不居住在加拿大的non-resident,赚了加拿大的钱,也必须要向加拿大缴税吗?

[linghc]

It sounds like everybody only has half bottle of vinegar.

[ChinaSmileJoe]

作者: linghc

It sounds like everybody only has half bottle of vinegar.

论坛就是讨论用的，如果你希望一下子有权威解答，建议你寻求专业人士的收费服务。

[bank]

有一个说明叫［Part XIII Tax］，是将关于非居民扣税的，不知道是否适用你的情况。上面说先扣２５％。

[呵呵]

作者: linghc

It sounds like everybody only has half bottle of vinegar.

That's ture, because you have no way to get a whole bottle of vinegar for free.

[linghc]

I will do some research myself on this subject, I have no vinegar on this yet. Thank you for the input.