What makes it contractors different from an ordinary filing?
An independent IT contractor abroad is running a business, which raises the permanent-establishment question about the contractor's own company and, in some systems, the personal-services-business rules that deny it ordinary treatment. An ordinary preparer applies the general rule and stops there, which is how the relief in the specific provision goes unclaimed.
Can you work with my existing accountant?
That is how most of these engagements run. They keep the domestic file, we take the cross-border piece, and the boundary is agreed in writing so nothing is done twice or missed.
Does working on-site abroad for a contract create a filing obligation there?
It can, particularly once time spent on-site in that country reaches a point where local rules treat the contractor as having a taxable presence, separate from any obligation in their home country. The contract structure — direct engagement, agency, or through a personal company — also affects which country's rules apply first.
Should an IT contractor bill through a personal company or directly?
It depends on where the client is based, how long the engagement runs, and how each country treats income earned through a corporation versus income earned personally. A structure that works well for a domestic contract can create extra filing obligations once a client or work location is in another country, so it is worth reviewing before signing.
Is contract income taxed where the client is or where I live?
Both can apply — many countries tax income earned by someone physically working within their borders regardless of where the client is headquartered, while the contractor's home country generally taxes worldwide income as well. A treaty between the two usually provides relief so the same contract income is not taxed in full twice.
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.
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.
