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I have won a contract in the US which is worth about USD$145,000. Most of the money will be paid out to contractors in Canada and in India. Should I Incorporate a company for this and what would be the USA and Canadian tax implications?

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You should incorporate the company as this will reduce your liability. Please hire all subcontractors through your corporation. Remember you have to issue T5018 slip for Canadian subcontractors.

You will not be paying any tax in USA, as long as you do not have any permanent establishment in USA and you do not stay in USA for more than 06 months.

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