{"id":311,"date":"2013-01-07T17:55:48","date_gmt":"2013-01-07T17:55:48","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=311"},"modified":"2025-02-12T13:29:34","modified_gmt":"2025-02-12T21:29:34","slug":"cra-considers-us-llc-and-canadian-branch-tax","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2013\/01\/cra-considers-us-llc-and-canadian-branch-tax\/","title":{"rendered":"CRA considers US LLC and Canadian branch tax"},"content":{"rendered":"<p>The CRA does not consider a US limited liability company (LLC) itself to be a resident of the US for purposes of benefits under the Canada-US tax treaty (Treaty). However, pursuant to Article IV(6) of the Treaty, the CRA will permit an LLC to claim benefits under the Treaty on behalf of a <em>member<\/em> of the LLC \u2013 provided the member is a US resident qualifying for benefits under the Treaty. In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2013\/01\/2012-0440101E5.pdf\">2012-0440101E5<\/a>, the CRA confirmed that this \u201clook-through\u201d treatment for LLCs also applies for the 5% Canadian branch tax rate in Article X(6) of the Treaty, but only in respect of <em>corporate<\/em> members of the LLC. No provision of the Treaty otherwise reduces the 25% Canadian branch tax imposed on that portion of the LLC\u2019s Canadian branch profits considered to be derived by individual members (under the look-through rule). The CRA further commented that an LLC has only one $500,000 cumulative branch profits exemption under Article X(6). That is, once the LLC\u2019s entire cumulative earnings attributable to a permanent establishment in Canada (less the permitted amounts in Article X(6)) exceed $500,000, the LLC\u2019s corporate members cease to qualify for a branch tax exemption and are subject to the 5% branch tax rate.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The CRA does not consider a US limited liability company (LLC) itself to be a resident of the US for purposes of benefits under the Canada-US tax treaty (Treaty). However, pursuant to Article IV(6) of the Treaty, the CRA will&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-311","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/311","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=311"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/311\/revisions"}],"predecessor-version":[{"id":2826,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/311\/revisions\/2826"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=311"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=311"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}