Hiring an employee in another country — can I handle this myself?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: payroll follows the place of work.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Do I have to run payroll where my employee actually lives?
Payroll follows the place where the work is physically performed, not the place the employer is registered and not the currency the salary is paid in. So an employee working from another country will usually bring a payroll withholding and remittance obligation in that country, owed by the employer. It arrives with the first employee rather than at some later threshold, and it is owed whether or not the company has any other presence there. Establish the registration position before the start date, because back-registering a payroll after several months of unremitted salary is considerably more work than opening one.
My employee is paying social security in two countries — can that stop?
Often it can, but not through the tax treaty. Social security is dealt with by a separate instrument, a totalization agreement, which exists between some pairs of countries and not others. Where one applies, it assigns the employee to one system and the mechanism for proving it is a certificate of coverage issued by the home authority. Without that certificate in hand, the host country's system will generally expect contributions regardless of what is being paid elsewhere. The certificate is usually applied for by the employer, and it is easier to obtain before the assignment starts than afterwards.
Can one employee abroad make my company taxable in that country?
It can, and this is the obligation that costs most. Whether an employee's activity creates a taxable presence for the employer is a treaty question, decided by what the person actually does rather than by their job title or where their laptop was bought. Activity that amounts to concluding contracts, or playing the principal role leading to the conclusion of contracts, is treated very differently from purely preparatory or auxiliary work. It is a separate test from payroll and from social security, and satisfying those two says nothing at all about this one.
Does using an employer of record remove our permanent establishment risk?
It addresses the payroll obligation, which is real and useful. It does not decide the separate question of whether your employee's activity creates a taxable presence for your company, because that test looks at what the person does on your behalf and for your business, not at who processes the salary. Providers do not generally give an opinion on it, and clients frequently assume the whole area is covered. If the person abroad is selling, negotiating or committing the company to anything, have the treaty position looked at on its own terms rather than inferred from the arrangement.
Our salesperson works from home in another country — does that matter?
A salesperson is the shape of case that most often creates a taxable presence for the employer, because selling is the activity the treaty tests are written around. A home office used for administration is generally a different matter from one used to negotiate and close business, and the distinction turns on evidence — what the person's authority is, how deals are actually agreed, and what customers understand themselves to be dealing with. Look at the real facts and, if the position is tight, decide deliberately what the role will and will not include, and record it.
Does the tax treaty cover social security contributions as well?
No, and treating it as if it does is a common and expensive assumption. The tax treaty deals with income tax and with whether the employer has a taxable presence. Social security sits outside it entirely and is governed by a totalization agreement, where one exists between the two countries concerned. The pairs of countries covered are not the same, the tests are not the same, and the paperwork is not the same. Check the two instruments separately for the specific countries involved, because relief under one tells you nothing about the position under the other.
Are foreign trusts taxable in Canada?
They can be. Canada's deemed-resident-trust rules can pull a non-resident trust into the Canadian tax system where there is a resident contributor or, in some cases, a resident beneficiary — taxing it as though it were resident here. Separate reporting applies to transfers or loans to a non-resident trust and to distributions and debts from one. The planning point is that contributing to an offshore trust from Canada rarely achieves what the brochure suggests. See non-resident trusts.
What is GILTI?
A US rule that taxes shareholders of controlled foreign corporations currently on the corporation's income above a routine return on its tangible assets, rather than waiting for a dividend. The target was profit — especially from intangibles — parked in low-tax jurisdictions. The name, the deduction and the asset-based reduction are the parts Congress has revisited, so we compute it from the rules in force for the filing year instead of a remembered percentage. See the GILTI inclusion and Form 8992.
