Accounting, Payroll & Pension Issues/Canadian income tax

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Question
My company is based in the US but sells software and services both in the US and internationally.  In Canada we have an office that houses a number of support personnel in British Columbia.  I am a sales person and live in the US.  For the last several years I have had both US accounts and Canadian accounts.  For 2013 I may be selling in Canada only.  I will spend approximately 6 - 9 days a month in Canada.  Will I have to pay Canadian income tax?  On all my income?  Do I get relief from US income tax?  Thanks so much

Answer
If you are in Canada less than 183 days a year you are considered a nonresident of Canada for the purpose of income tax  This means you could spend 10 days a month in Canada and still fall under the nonresident designation.

Your company also cannot have a fixed base or establishment in Canada.

Non residents are taxed on Canadian source income. Unless you spend more than 183 days a year in Canada or set up a permanent residence you only have to pay on the amount you earn in Canada.

The U.S. has a totalization agreement with Canada. This agreement says that temporary workers that are in the other country only temporarily will be taxes to their home country. This means that the Fica and medicare tax would be paid to the U.S. and you would not pay Social Security or C.P.P. tax in Canada.

You would need to get a certificate of exemption from Canadian CPP(Form CPT 56A. You obtain that from
CPP/EI ruling Department
Department of National Revenue
333 Laurier Ave. West 7th Floor
Ottowa, Ontario
Canada K1A 0L9

Shirley  

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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