Do I need Form RC1 if my company is registered abroad?
Incorporation abroad does not settle it. Form RC1 registers a business number and the CRA programme accounts a business needs, and a foreign business reaches it once it acquires Canadian filing, payroll or sales-tax obligations. The question is what the business actually does in Canada: who performs the work, where the contracts are concluded, whether anyone is employed here. Answer that first, then register the accounts the facts require. Opening accounts the business does not need creates reporting it then has to keep up with, period after period.
Which CRA programme accounts should I open on the RC1?
Only the ones the activities call for. The form opens programme accounts under a single business number, and each account opened carries its own returns from that point onwards. Which accounts a foreign business needs depends on what it actually does in Canada. A business selling into Canada with nobody employed here has a different account list from one with staff on the ground and premises to match. Decide that list from the facts before the form is signed, rather than after the first notice arrives asking for a return nobody expected.
Can I open a payroll account before settling the permanent establishment question?
You can, and it is the wrong order. Opening a payroll account before deciding whether there is a permanent establishment can create obligations a review would have avoided: the account exists, remittances and returns are expected against it, and unwinding it is more work than the review would have been. Settle the permanent establishment question on the facts of what happens in Canada. If there is no establishment and nobody is employed here, the payroll account may not be needed at all, and the registration is simpler for leaving it out.
Does one contract in Canada mean I have to register?
Not by itself, and not never either. The obligation follows what the business does rather than the size of a single contract: whether it is carrying on business in Canada, whether it employs anyone here, whether what it supplies attracts sales tax. A contract performed entirely outside Canada sits differently from the same contract performed here with people on site. Set out the facts of the engagement, meaning where the work happens, who does it and what is delivered, and the account list follows from those facts.
Do I still file RC1 if the company has no income yet?
Yes, where the accounts are needed. Registration is not a function of profit. A company incorporated in Canada needs a business number for its corporation income tax account whatever the first year looks like, and a nil year is still a filed year. The same logic runs through the other accounts: a payroll account is needed because someone is employed, not because the business is making money. A nil position does not remove the obligation. It only changes what the return says when it is filed.
Who signs Form RC1 for a foreign parent company?
Someone authorised to bind the business, such as a director or an officer, or a person holding authorisation the CRA will accept. For a foreign parent this is worth settling early, because the signing authority, the legal name of the entity and the identifying details of its directors all have to match the records held elsewhere. Mismatched names and addresses are the common reason a registration comes back for correction. Gather the corporate documents, agree the account list, then sign once rather than three times.
How do you avoid double taxation?
You claim relief once, in the right country, in the right order. Usually the source country taxes first, the residence country then gives a credit for that tax against its own charge on the same income, and a treaty caps the source-country rate. Getting the order wrong is what produces a double charge you then have to unwind. The mechanism differs by income type, which is why we map the whole position before filing either return. See how to avoid double taxation.
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.
