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How does revenue taxes work in U.S if business is registered in Canada?

by Bimmer
8 replies
Let's say i registered my business in Canada, but my online affiliate marketing business focused only on U.S retailers from affiliate programs such as Commission Junction and LinkShare.

How does taxation work for affiliate marketing if I have no physical presence in the U.S, and the business is operating from Canada? Do I owe the U.S or Canada the revenue tax? Is the amount taxable based on the total annual amount generated from each Affiliate Program or do I need to figure out which states the commissions came from? I recalled reading somewhere about a new law being passed on e-businesses where sales taxes will differ depending on each state.
#business #canada #registered #revenue #taxes #work
  • Profile picture of the author semsniper
    Yes, there's been lots of talk in the US about forcing ecommerce companies to charge sales tax across the board.

    However, since you are not registered in the US or physically located in the US, US tax laws don't apply to you.

    You only need to worry about filing and reporting your sales to Revenue Canada.

    Note: I am NOT an accountant or expert, but this is what i know based on experience.
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  • Profile picture of the author Winlin
    If this is a tax avoidance scheme, you likely need to bring in a tax accountant to advise you.

    However if you wish to allow a group of internet marketers to advise you on this topic I'm sure they they will need to also know - "Are you a U.S. or Canadian citizen?" and "Do you live in the U.S. or Canada?"

    Also are you referring to state and local taxes specifically or are you asking about your Federal or National tax obligation?
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    • Profile picture of the author Bimmer
      Originally Posted by Winlin View Post

      If this is a tax avoidance scheme, you likely need to bring in a tax accountant to advise you.

      However if you wish to allow a group of internet marketers to advise you on this topic I'm sure they they will need to also know - "Are you a U.S. or Canadian citizen?" and "Do you live in the U.S. or Canada?"

      Also are you referring to state and local taxes specifically or are you asking about your Federal or National tax obligation?
      It is not a tax avoidance scheme. It is more about filing taxes properly and yes, I am a Canadian citizen living in Canada. I was just asking to see if someone was in the same position as me so I can get an idea of their tax filing process
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  • Profile picture of the author Rod Cortez
    Originally Posted by Bimmer View Post

    Let's say i registered my business in Canada, but my online affiliate marketing business focused only on U.S retailers from affiliate programs such as Commission Junction and LinkShare.

    How does taxation work for affiliate marketing if I have no physical presence in the U.S, and the business is operating from Canada? Do I owe the U.S or Canada the revenue tax? Is the amount taxable based on the total annual amount generated from each Affiliate Program or do I need to figure out which states the commissions came from? I recalled reading somewhere about a new law being passed on e-businesses where sales taxes will differ depending on each state.
    You're going to get a lot of inaccurate information (you already have).

    You need to ask an accountant that specializes in this area.

    RoD
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  • Profile picture of the author OnlineAddict
    You live in Canada, are Canadian, have a business set up in Canada and make money online. Why in god's name would you tax any of your income outside of Canada?
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    From1toMillion Forex EA
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    • Profile picture of the author Bimmer
      I get what you are saying. Well, perhaps, my question was stupid to begin with. But I was just thinking differently because if I signed up with Commission Junction and just deal with U.S retailers, then the commissions would be coming from the U.S and are paid to me by a U.S company.
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  • Profile picture of the author onSubie
    If you are talking about Income Tax, you must declare all your income from all sources for Income Tax purposes. Since you are a Canadian living in Canada you would pay the income by declaring it on your tax return to Revenue Canada.

    Most likely, as an individual, you would declare it as Self Employment Income

    Self-employment income Lines 135 to 143 - Net income Lines 162 to 170 - Gross Income

    The tax forms you use, deductions, etc. depend on the specifics of your business/income.

    You wouldn't have to declare any money as 'income' in the U.S.

    If you are talking about local and state taxes on sales and/or commissions that would depend on the specifics of what you were selling and how you were selling it.

    For most affiliate programs these taxes would be handled by the seller at point of sale before paying your affiliate commission.

    Mahlon
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    • Profile picture of the author Bimmer
      Ok thank you
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