6 Foreign-Owned Canadian Corporation Tax and accounting engagements in full — what the client came to us with, what we did, and what it was worth. Each one is specific to foreign-owned canadian corporation tax work, not a general example.
Case Study 1 · CRA review defended
Audit Defence Closed In 3 Weeks, $96,000 Cleared — Snowbird Spending Winters in, London
Client: A snowbird spending winters in Arizona · Where: London, Ontario · Engagement: 3 weeks, fixed fee
Proposed tax cleared$96,000
Review duration3 weeks
OutcomeNo change
The situation
A snowbird spending winters in Arizona in London, Ontario was selected for review after US tax paid but no foreign tax credit claimed on the Canadian return showed up in the CRA's automated matching. The proposed adjustment on foreign-owned canadian corporation tax came to $96,000.
What we did
We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result
The review closed with no change. $96,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Case Study 2 · Cash and remittance control
$125,000 Of Working Capital Freed From The Tax Cycle — Canadian Corporation with US, Kitchener
Client: A Canadian corporation with US customers · Where: Kitchener, Ontario · Engagement: 6 weeks, fixed fee
Working capital freed$125,000
On-time remittancesEvery period since
Forecast horizon13 weeks
The situation
A Canadian corporation with US customers in Kitchener, Ontario was profitable on paper and short of cash every month. A US LLC taxed as a corporation in Canada, producing double tax on the same income explained most of the gap.
What we did
We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely and built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result
$125,000 was released back into working capital. Remittances have been on time every period since, and the forecast shows the tax outflow before it lands.
Case Study 3 · Objection and relief
$99,000 Of Penalties And Interest Cancelled On Relief — US Citizen Living in, Moncton
Client: A US citizen living in Canada · Where: Moncton, New Brunswick · Engagement: 8 weeks, fixed fee
Penalties and interest cancelled$99,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation
An assessment of $99,000 landed at a US citizen living in Canada in Moncton, New Brunswick following a desk review. The auditor had not seen the records behind a departure year filed as a normal resident return with no deemed disposition reported.
What we did
We reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused, then set out the legislative basis for the position alongside the documents supporting it.
The result
$99,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 4 · Sale and succession
$875,000 Sheltered By The Lifetime Capital Gains Exemption — Canadian Resident with a, Lethbridge
Client: A Canadian resident with a US rental property · Where: Lethbridge, Alberta · Engagement: 8 weeks, fixed fee
Gain sheltered$875,000
ClosingOn schedule
Share qualificationMet
The situation
A Canadian resident with a US rental property in Lethbridge, Alberta had an offer on the table and 12 months to close. The shares did not qualify for the capital gains exemption, and no valuation on file to support the price the parties had agreed was part of the reason.
What we did
We purified the corporation so the shares met the qualifying tests, then filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund well ahead of the closing date.
The result
The sale closed on schedule with $875,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 5 · Cross-border exposure resolved
Foreign Reporting Brought Current, $87,000 Recovered — Shareholder of a US, Mississauga
Client: A shareholder of a US LLC · Where: Mississauga, Ontario · Engagement: 5 weeks, fixed fee
Amount recovered$87,000
Reporting statusCurrent
Annual effortHours, not weeks
The situation
Foreign holdings at a shareholder of a US LLC in Mississauga, Ontario had passed the reporting threshold without anyone noticing. Behind the disclosure problem sat 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net.
What we did
We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward, claiming the treaty relief and foreign tax credits on the Canadian return and correcting the disclosure position for the open years.
The result
The treaty position was accepted and $87,000 was recovered. Reporting is now current and the annual process takes hours rather than weeks.
Case Study 6 · Scaling without breaking
Scaled To 49 Staff With $123,000 Of Working Capital Freed — Inbound Transferee on Assignment, Hamilton
Client: An inbound transferee on assignment · Where: Hamilton, Ontario · Engagement: 11 weeks, fixed fee
Headcount reached49
Working capital freed$123,000
Missed deadlinesZero
The situation
An inbound transferee on assignment in Hamilton, Ontario was growing fast — headcount to 49 in eighteen months — and the back office had not kept up. US tax paid but no foreign tax credit claimed on the Canadian return was the first thing to break.
What we did
We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely, and built the compliance calendar for the size the business was becoming rather than the size it had been.
The result
The business reached 49 staff with no missed remittance and no late filing. $123,000 of working capital was freed in the process.
Reviewed for the 2025 tax year by Udit Gupta, Certified Tax Accountant. Figures describe representative engagements of this type; outcomes depend on your own facts. Client names and identifying details are omitted for confidentiality.
