Canada is the United States’ leading trade partner, and in recent years the economies of these two countries have become increasingly integrated. Both countries have complex business environments, and trade is regulated by a combination of U.S. and Canadian tax laws, NAFTA and the U.S. Canada Tax Treaty.
The Tax Treaty has a broad impact on individuals and corporations engaged in cross-border commercial activity. With the Fifth Protocol now in full force, significant changes affect many areas of cross-border tax, including:
Canadian US Tax Team Cross Border Tax Solution
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On Jan. 7, 2016, the IRS added new frequently asked questions (FAQs) to its website on the streamlined offshore compliance program, which includes guidance to participants in Canadian registered retirement savings plans (RRSP), registered retirement income fund (RRIF) or other similar Canadian retirement plans. Generally, an individual who is a citizen or resident of the US and a beneficiary of a Canadian retirement plan may be subject to US tax on accrued income in the plan even though the income is not currently distributed to the beneficiary.