If you own property or work in the U.S., you already know it can come with its own challenges. Having a significant understanding of cross-border financial and business matters is necessary to be successful in your endeavours.
By working to provide you with industry-leading cross border tax services, HSM relieves some of that stress. Whether corporation or individual, we work to keep your business running smoothly and maintain great financial standings; including helping you organize cross-border assets.
Have a team of chartered accountants backed by experience. This will go a long way to inform the success of your business transactions.
Foreign Investment Property
One thing to keep in mind when dealing with cross border taxation is Transfer Pricing and Foreign Investment Property. Both of these can have different effects on what you make financially.
Foreign Investment Property just applies to the money you hold in foreign bank accounts, interest in non-resident trusts, shares involving foreign investments into different companies, and debentures and bonds that have been acquired from foreign governments.
What is Transfer Pricing?
Both individuals and companies that work for multinational or American companies can have tax authorities staking their claim for what you have made. This is where transfer pricing can come into play.
Transfer pricing is the pricing of transactions between related companies from different countries. It can also apply to certain Canadian companies with no more than a taxable presence in other countries. These companies will be required to make sure taxable profit in each different country is the same as if the companies were independent.
T1135 Tax Form
If you own foreign investment properties that are worth more than $100,000, no matter what time of the year, you must complete and file Form T1135 with your income tax return. This applies to corporations, individuals, trusts, and partnerships; and this form will need to be filled in if they own this level of foreign investment property.
If you forget to file this form there can be some strict penalties, even if you have an accountant doing your taxes you will still be held responsible for making sure the T1135 tax form was filled out and sent properly to the CRA.
It’s imperative you complete the T1135 form for any tax year you have foreign properties. If this is forgotten, it is still possible to claim a Voluntary Disclosure to avoid penalties and their stiff payments. While claiming Voluntary Disclosure you must make sure to include the T1135 form along with the VD form, from the previous year or years that you may have forgotten.
Filing The T1135 Form
Luckily, the T1135 form can be filed digitally and at your convenience for ease of the process. By doing this electronically, later you will receive a confirmation number confirming the CRA has successfully received your form. It is best to keep this confirmation for your records.
How Can HSM Help You?
HSM is here to help you prepare to file tax returns whether they be personal or corporate, give you advice on basic tax planning, and structuring of transactions and operations. With our team of advisors and experience in taxation, we tailor our approach towards your unique needs and provide high-quality service to give you your financial advantage.
Trust us to provide the resources you need to make great decisions for your business and book an appointment today to get started.
