Questions

I am a US & Canadian citizen selling on Amazon. For tax & convenience reasons, is it better to incorporate in the USA or Canada?

I expect gross revenues of $600,000 annual, and profits of $250,000 I currently live in Canada, but visit the US 5 times a year.

3answers

I am not an accountant or an attorney and this is not "professional advice."

As a Canadian living in the US, my understanding as you have dual citizenship is that you must pay US taxes on everything you make anywhere in the world. So in addition to any taxes you may pay Canada, you must pay taxes on those earnings to the US as well.

I don't yet have dual citizenship, so I have not crossed this Rubicon myself. However, it has been on my mind the past five years or so.

Speak to a US tax accountant specializing in these situations and get their advice. Spend the $200 or whatever for an hour consultation with that accountant if you have to--it's a tax-deductible expense and money well spent. Maybe speak to more than one, because you know if you speak to two people you can get two completely different answers based on their personal knowledge and experience.

Off the cuff, if I was in your shoes I'd incorporate in the US. But again, I'm not a tax accountant or an attorney and don't have all the information.


Answered 8 years ago

It depends on various factors, including tax implications and convenience. Here are some considerations to help you make a decision:
1)Tax considerations: Tax laws and rates differ between the USA and Canada. It is better to consult with a tax professional who has expertise in cross-border taxation.
USA incorporation: If you incorporate in the USA, you may be subject to US federal and state taxes.
Canadian incorporation: If you incorporate in Canada, you will be subject to Canadian federal and provincial taxes
2)Personal circumstances: Consider your long-term plans, residency status, has potential impact on your personal taxes, benefits, or access to healthcare in both countries.
3)Nexus and sales tax: Selling on Amazon may create sales tax obligations in the states where your customers are located.
Ultimate choice depends on your circumstances and the specific factors that are important to you.


Answered 8 months ago

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