BritCanadaNewbie

Actually another query , on a first time payroll what tax code are you on as a new immigrant ?

JonboyE

The basic personal amounts are $11,327 for federal tax and Ontario $9,863. That said, the Canadian income tax system does not work the same way as PAYE in the UK. You self-asses and file a tax return each year rather than relying on HMRC to calculate the tax they think you should pay.

Steve_

It's a lot simpler here, imo. What are there, six payroll codes?

In the UK it superficially appears to be simpler because HMRC try and do everything for you but in reality they're doing that to extract as much tax as possible. It is in fact far more complex, PAYE RTI.

Forms of corporation I suppose are more complicated because of CCPCs and Federal corporations.

I see a lot of companies set up to use Federal corporations that don't need to. Just because you do business in another province doesn't mean you need to use a Federal corporation. If you have offices across the country and people on payroll across the country, then it makes sense, but having customers outside of the province, generally not.

Also I never really understand why some provinces require the majority of directors to be citizens or permanent residents, apparently Ontario is planning on scrapping that.

BritCanadaNewbie

Hi Guys,
Managed to get a new contract but the company has now asked me for the following documents,

3. Certificate of Insurance (Sample showing the coverage limits)
4. W8-BENE form (read instructions on http://www.irs.gov/instructions/iw8bene/)
5. GST/HST Registration document with number/id

I've no clue about these. Anyone point me in the right direction?
Thanks Guys,
-

dbd33

The GST certificate is usual and simple enough but the others are perplexing. The only jurisdiction I've worked in where insurance was required was California, what sort of coverage are they asking for? The IRS form isn't obviously relevant, have you incorporated in, or become resident in, the US? Are you an American?

BritCanadaNewbie

No, not in america. I'm working remotely and being paid Corp to Corp. Yes I'm incorporated. But thats all i've done so far is get my incorporation number. where do I get the GST certificate form from? is that where I have to register for a Business number?

JonboyE

If the payer is a US corporation/person he will need the W-8BEN to certify that he is not taxable in the US.

BritCanadaNewbie

ok so fill in this form and send to my employer?
https://www.irs.gov/uac/About-Form-W-8BEN-E

JonboyE

Yes. If ON is the same as BC your business number will have been allocated when you incorporated. Something like 123456789 ON 0001. The first 9 digits are the business number. It is not the same as the provincial incorporation number. You need to go to the Canada Revenue Agency website to register for a GST account. Once registered your GST number will be 123456789 RT 0001.

dbd33

Registering for a GST/HST account

BritCanadaNewbie

Aah. I see. Great help guys. Thankyou !

JonboyE

Employer? But yes, if you are contracting to a US company.

BritCanadaNewbie

Actually, when do I pay taxes? At the end of this fiscal? Or every time I invoice?

JonboyE

For GST you get a choice of reporting period subject to your income. You can choose to be an annual filer. In this case you pay the GST three months after the end of your reporting period. If the amount due is more than $3,000 then you will also pay quarterly installments.

If you are billing a US client the rate of tax to charge is zero.

Corporate income tax on active business income is due three months after the fiscal year-end. If the federal tax is more than $3,000 you will also have to pay monthly installments.

BritCanadaNewbie

Ok guys. Managed to get sorted. Your right I do already have the business number. Jonboy - Can you let me know how I fill in the W-8BEN form? I will be paid in US dollars so really unsure how to fill the form in. If your working remotely for US firm, then how does this work in terms of taxable income?


update.. ooh actually managed to find a good template!
http://ontariotaxmen.ca/w8-ben-e.htm