Key points to know regarding Canada-US taxation

Canada has joined into tax agreements with a lot of nations, but none is regarded more essential than the Canada-US tax agreement. The significance of this agreement is mostly because both the nations are nearby and there are a lot of people, or tax payers you can call them precisely, of US are residing and operating in the Canada as well. Canada-US tax agreement has seen a number of amendments. The first agreement was signed on Sept 26, 1980, which was followed by a number of amendments in June'83, March'84 and '85, July'97 and the recent one December'08.

The United States of America and Canada have powerful business interaction and therefore there are a lot of individuals who work across these borders for business purpose. The need for the Canada-US tax agreement was necessary for developing interaction between the two nations and to accomplish the convenience in which individuals of one nation could work and alongside earn in the other nation.

According to the Canada-US tax agreement, personal income of a non-resident of one nation and the citizen of the other can be excused provided the circumstances that are described in the agreement are satisfied to full extent. However some exceptions are allowed and can be acquired by a non-resident are:

• If the complete transaction is less than $10,000 in a tax season, the non resident is exempted from paying the task.
• A individual who is making more than $10,000, but has invested less than 183 times over a interval of 12 several weeks in the nation is also exempt from spending tax.

Any earnings that is produced from self is regarded to be company earnings and is subject to taxes by the US and Canada. The company benefit will be used by each nation. Content V of the Canada-US agreement speaks about long lasting businesses and how one can have them in the nations.

Income that is obtained out of regular retirement advantages or annuities that are compensated to a non-resident will be subjected to taxes by the non-resident nation. But according to the Canada-US tax agreement the highest possible tax that can be implemented for such earnings is 15% of the total. There are a lot more exceptions that one can get out of the tax agreement.

These are some of the notable key points regarding the tax treaty between Canada and the US. There are numbers of other information too, which are a bit difficult to understand by the novices. You can find more information in this regard over internet or else, can ask any tax professional.

Josep Guardiola is a expert on tax, who practices as an independent tax consultant. He is providing lots of information about how to manage canada-us tax. In this article you can find details information about tax planning. For more information visit taxca.com.

In these times of economical downpour and recession, many people find themselves immigrating to other countries in search of greener pastures.