Expanding into Canada: accounting and tax questions to address first
Before the first Canadian invoice goes out, a handful of accounting and tax questions are worth settling — here's where most companies should start.
Companies expanding into Canada often focus first on the commercial opportunity, and only later on the accounting and tax framework required to support it. Addressing a few core questions early tends to save time and avoid rework once activity is underway.
The first question is usually structural: will you operate through a Canadian subsidiary, a branch of the foreign parent, or another arrangement? The answer affects how the business is taxed, what filings apply, and how straightforward it is to open a Canadian bank account or hire local staff.
The second question relates to sales tax. Most goods and services supplied in Canada are subject to GST/HST, and businesses selling into Québec may also need to register for QST. Registration thresholds and rules for non-resident businesses differ from what applies to a Canadian-resident company, so this is worth reviewing specifically rather than assuming domestic rules apply.
Finally, it's worth mapping out basic accounting requirements early: what bookkeeping and reporting will the Canadian operations need locally, and how will that information flow back to the parent company for consolidated reporting? Getting this structure right from the outset is generally easier than correcting it later.
This article outlines general considerations only and does not constitute tax or accounting advice for a specific situation. EXCOFIM can help assess which of these questions apply to your circumstances and coordinate the appropriate local expertise.