If your organization has plans to expand into the US
market, you are in good company. The dominant international
market for Canadian companies continues to be the
United States. But US tax laws can be complex, and
Canadian companies may be subject to costly tax liabilities.
Federal tax refunds, warehouse locations, transfer
pricing and corporate capitalization – these
are just a few of the many issues that may need to
be addressed
in managing a company's overall tax liability.
Other issues Canadian companies should consider include:
- Deciding
which US corporate structure makes the most sense from
a tax perspective – subsidiary, branch or joint-venture
partnership
- Choosing
the most beneficial type of subsidiary capitalization – debt,
equity or a combination of the two
- Determining
how a limited liability company (LLC) can help your
company meet certain strategic objectives
- Locating
operations in jurisdictions that offer incentives,
such as property tax holidays.
Once your business is established in the US, you should:
- Ensure
profits are repatriated to Canada at a manageable
tax cost
- Identify
and benefit from valuable US federal tax incentives
- Claim
important sales and use tax refunds
- Negotiate
with the IRS and state tax authorities
- Structure
your operations to enhance opportunities for deductions
- Develop
a transfer pricing strategy that meets your business
needs and complies with the relevant statutory
provisions.
Disclaimer
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"The
information contained herein is of a general nature and
is not intended to address the circumstances of any particular individual
or entity. Although we endeavor to provide accurate and
timely information, there can be no guarantee that such information
is accurate as of the date it is received or that it
will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough
examination
of the particular situation.
KPMG and the KPMG logo are registered trademarks of KPMG
International, a Swiss cooperative.
© 2006 KPMG LLP, the
Canadian member firm of KPMG International,
a Swiss cooperative. All rights
reserved."
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