THUNDER BAY – Grant Thornton consultants are urging business owners looking at expanding into the United States to consider the income tax consequences.
Given the close proximity between Canada and the United States accounting firm Grant Thornton hosted a presentation Friday morning geared toward the various income tax implications of doing business across the border.
Grant Thornton senior tax manager Diane Zimmerman said there are opportunities expanded into the US, but there are some issues businesses owners should know ahead of time.
“One of the significant issues people have to consider are the income tax consequences,” Zimmerman said.
“When you go in prepared and understand what the consequences are, it’s much easier to fathom the multitude of US requirements you are going to have to adhere to whenever you expand into another country.”
Zimmerman discussed the various structures used, whether it be as a proprietor, a corporation, a branch, and a subsidiary of the corporation.
They each have different income tax consequences and implications.
The presentation focused on educating business owners on the issues they should know about, and what they should do to prepare for those potential problems.
“Some people aren’t aware of (the issues) of it, so a lot of times when there’s opportunities and you don’t plan properly people aren’t aware and sometimes they are surprised by the red tape,” Zimmerman said.
She added that whenever possible there’s ways to mitigate any adverse income tax consequences, but not always.
“We are making people aware that there are opportunities, there are restrictions, there are things that they are going to have to consider,” she said.
“It’s not as easy as just going down and selling products in the United States.”
Grant Thornton is focusing on income tax for the presentation, but there are also various business registrations, immigration issues, and custom issues people should know.
Zimmerman said from a tax perspective there are a lot of things to consider.
Despite these implications Zimmerman said if you can expand your market than you should.
“It means getting your name out there, getting your product out there, building your business and making it more profitable,” she said.
“I wouldn’t suggest anybody limit their opportunities to go into the United States strictly because of income tax legislation.”
