Our site has run longer than planned, does the host country tax us from the start?
Often from the start of the project rather than from the day the threshold was crossed, which is what makes an overrun expensive. Construction sites have their own permanent-establishment provision, and once a site runs beyond the treaty's duration threshold the employer is treated as having had a taxable presence, usually back to when the work began. Host payroll for the crew tends to follow. The date the site started, the periods of genuine suspension, and the date of handover therefore all matter, and they have to come from site records rather than from the contract programme.
Is my per diem taxable in the host country?
Partly, in most cases. A payment reimbursing a documented cost you incurred because the employer sent you to the site is treated differently from a flat daily amount that supplements your pay, and each country draws that line in its own place. Being paid a round sum for every day away, with no records behind it, is the version most likely to be taxed in full. Keep the accommodation and travel documents and the employer's policy stating what the payment is for. That evidence is what separates the reimbursement from the pay.
My employer registered nothing locally and we are all being assessed, what now?
Deal with the crew's position and the employer's position together, because they rest on the same facts. The host state is assessing individuals because no employer took on the withholding, so the questions are when the employer's presence arose, what should have been withheld from that date, and what each worker actually earned for work done there. Once the project timeline is established and the payroll recomputed, individual assessments can often be replaced by a corrected employer position, with credit given for anything already collected. Filing the workers' returns alone leaves the cause in place.
Does a construction site create a permanent establishment for my employer?
It can, under a provision written specifically for building and installation work, and the test is duration rather than the presence of an office. A site lasting beyond the threshold in the treaty that applies creates the presence; a shorter one generally does not. What counts as the same site is where arguments start, since sequential contracts for one development, or work split between group companies, may be aggregated. The consequences reach the workers, because once the employer has a presence the host state usually expects payroll on the crew's pay for work done there.
Do mobilisation and handover periods count towards the project duration?
Usually yes, and that is how projects cross a threshold their programme said they would not. Site preparation, setting out, and the period up to completion or final abandonment tend to be included, while a seasonal or contractual suspension may not break the count in the way people expect. The reliable approach is to date the start from the first site activity, log every suspension with its reason, and date the end from handover rather than from the last invoice. Keep that log from the beginning; it cannot be reconstructed convincingly afterwards.
Can I claim credit at home for host country payroll tax?
Generally yes, where you are resident at home and the host state was entitled to tax work done there, but the claim needs the host charge to be established rather than merely deducted. A payslip deduction with no host return behind it is the weakest form of evidence, and over-withholding you could have recovered abroad is often refused at home. Settle the host filing, obtain the assessment, then claim the credit against the amount finally due. Where the host state was not entitled to tax the income, the money comes back from there, not as a credit at home.
Do US citizens living abroad have to pay US taxes?
They have to file, every year, on worldwide income — the United States taxes citizens wherever they live. Whether they end up owing is a different question: the Foreign Earned Income Exclusion, the foreign housing exclusion and the foreign tax credit frequently reduce the bill to nil while leaving the filing obligation fully intact. Foreign account and asset reports run separately and carry their own penalties. See US citizens living in Canada.
Do Canada and the United States share tax information?
Yes, through more than one channel. The treaty has an exchange-of-information article that supports both routine and on-request exchange. Separately, an intergovernmental agreement has Canadian financial institutions identify US-reportable accounts and report them to the CRA, which passes them to the IRS, with the reverse flow for Canadian residents. Most other country pairs use the Common Reporting Standard for the same purpose. See FATCA reporting.
