U.S. Companies Urging Canada to Stop Imposing Withholding Tax on Visiting Workers

U.S. companies sending workers into Canada on a temporary basis are facing big problems with the country’s 15 percent withholding tax on services—a problem that is increasing as the global workforce becomes more and more mobile, practitioners told Bloomberg BNA in a series of interviews.

Despite an exemption under the U.S.-Canada income tax treaty for U.S. businesses that do not have a “permanent establishment” in Canada, those treaty benefits are tough to get and companies generally must obtain waivers of the withholding tax from the Canada Revenue Agency in advance.

Otherwise, they face having to withhold the tax and then ...