What do I have to file in Canada for a house in Mexico?
Two separate things, and they are easy to confuse. The income side reports what the house earns, if anything. The disclosure side reports the holding itself, and it applies whether or not the house earns a peso, because Canadian reporting of foreign holdings turns on ownership and cost. A property kept for the family's own use is treated differently from one held to earn income, so the use of the house decides which part applies. Before either can be prepared you need the acquisition cost in Canadian dollars at the date of purchase, and the terms on which the property is held.
Do I need to file a Mexican return if I rent my condo occasionally?
Renting property in Mexico creates an obligation where the property stands, and occasional letting does not remove it; it only makes the amounts smaller. The filing is not optional merely because a managing agent already deducts something at source, because a deduction at source is a payment on account, not a settled liability. It matters to your Canadian return as well. Relief in Canada is measured by what you were properly liable to pay in Mexico, so an unfiled Mexican year leaves the Canadian credit claim resting on a figure nobody has confirmed.
Does a Mexican bank trust have to be reported as a trust in Canada?
It depends on the instrument, which is why it gets read before anything is filed. Property held through a bank trust arrangement has to be characterised for Canadian purposes first: the arrangement may be treated as you holding the property directly, or as a trust with reporting of its own. Those two conclusions produce genuinely different filings, not different presentations of the same filing. The property, the location and the bank tell you nothing about which applies. Only the terms do, and a conclusion reached once should be written down so it is not re-argued each year.
What does my company file for its Mexican production arrangement?
The Canadian company reports the arrangement and the amounts flowing under it, and it needs documentation supporting the price charged between the two entities. That is the substance of the exercise. Each country tests the same charge against its own rules, in both directions, so documentation prepared for one side and unavailable to the other is half a defence. There is also withholding to account for on payments crossing the border, which is settled at the time of payment rather than at filing. The practical output is one description of what each entity does, supporting one price, usable by either authority.
Is a Mexican bank account I use for property expenses reportable?
A local account opened to pay dues, utilities and a caretaker is still an account held abroad in your name, and it belongs in the same disclosure as the property it serves. The balance is often small, which is exactly why it is forgotten and why it turns up later as an inconsistency between a bank record and a return. Interest credited to it is income in the year it is credited. The sensible approach is to list the account alongside the property from the start, so the disclosure covers the whole position rather than the visible part of it.
I never reported my Mexican property in Canada — what should I do now?
Correct it deliberately, and correct all of it at once. These files usually have more than one omission, because the property, the account that pays its bills and the rent it earned were all missed together for the same reason. The work is to establish the acquisition cost, reconstruct each year's income from whatever records exist, settle the Mexican position so the relief figure is real, and then put the Canadian years right. A correction you bring forward yourself, with the computation attached, is a different conversation from one that starts with a letter from the agency.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
Is double taxation illegal?
It is legal. Two countries can each have a valid claim on the same income — one because the income arose there, the other because you live there — and nothing prohibits both from exercising it. What exists instead is relief: tax treaties allocate the claim, and domestic law gives a credit for foreign tax paid. The relief is not automatic, though. It is claimed on a return, and unclaimed relief is simply lost. See how double taxation is relieved.
