Re: Dang furriners and the IRD

[Chris Kowalchuk <chris -at- BDK -dot- NET>]

Having done some cross-border selling (Canada to US), and knowing
several others that do, I can give you a few observations:

1.  The taxes that apply are determined by your location, and are only
applied to the party in that location. (I pay my income tax to my
government, not yours--also, it is not up to a foreign company to do my
paperwork for me if I am not an employee--if I am an employee then the
"who to pay taxes to" question opens up again--almost always to the
government where the company is, and sometimes to your own country of
residence too, if different. Then there's the definition of
residence...).

2. Tarrifs are different though. A tarrif would apply at the border if
the receiving country does tarrif that item. As far as I know, there are
not usually any tarrifs applied to services, (not by the US or Canada
anyway) but often to products.

3.  When a business buys your service, you are an expense, pure and
simple. Other than invoices/purchase orders etc., no fancy paperwork
should be involved.

3a. BUT--don't you dare cross that border and actually do work on the
company's site. Now you might be an illegal immigrant; you certainly do
not have a work permit. You can travel to the site to discuss business
or make a sale, but you can't do any work there. Actually working there
without the proper papers (regardless of your relationship to the
company) could get both you and the company into a lot of hot water.

4. Local taxes on goods and services (contentious issue in Canada) may
apply to companies outside the govermental jurisdiction that applies the
tax. Usually not though. Most countries, states, and provinces exclude
persons/organizations from outside their jurisdiction from paying local
taxes. Canadians do not have to charge Americans or other "foreigners"
GST (goods and services tax), but we do have to charge it to each other.
I've never had to pay a state tax when purchasing something from within
that state (unless I'm within the state at the time; even then you can
often apply to get refunded the tax if it shouldn't have applied to
you). I believe this is generally the case in the US, Canada, Britain,
and most Commonwealth countries, but I'm not sure.

As I say, these are only my observations, and I make no representation
as to their validity or applicability to your case. The fun part is, if
you try to guess which officials ought to be in charge of such things,
and find out from them, you seldom get quite the same story twice
either.

For the record, I generally support governments and reasonable levels of
taxation, accompanied by reasonable levels of social spending. I may
consider my current provincial government a "collective thug", but that
is because I believe that it misappropriates the revenue it does get,
not because I am opposed to the concept of government or taxation
generally. Whether your tax money goes to schools, roads, or a huge
military that helps to maintain your world dominance, and therefore your
economic power, it is arguably of collective benefit. There's a reason
why people in third-world countries, on average, make less money than
North Americans, and our payment of taxes is tied up in there, you wanna
believe it... I promise not to trouble the list with this sort of
political discussion in future, but I'd like to be able to respond to a
question without implicitly agreeing with its political overtones.

Chris Kowalchuk


 From ??? -at- ??? Sun Jan 00 00:00:00 0000=