US LLC and Canadian Tax

[gavanorio1]

I have a question regarding the taxation of a US LLC in Canada.
I'm considering opening a US LLC to conduct business from Canada. I own a software business, and since some of my clients are in the US, I'm considering opening an LLC.

In Canada, I'm operating as a sole proprietor in the province of Alberta. As a non-US resident, and given that my company has no permanent establishment in the US, the LLC would function as a pass-through company, and 0 tax would be paid in the US.

I understand LLCs are treated as a corporation in Canada. My question is: Does that mean that the profits made by my LLC are subject to corporate tax in Canada, OR income tax as I pay myself dividends, OR both?

From what I understood from examples I've read online, I would only be taxable in Canada from the dividends I pay myself (Personal income tax) - no corporate tax applies. Therefore, no double taxation applies, provided that no tax is applicable in the US.

Is that correct?

[TurboTaxBrenda1]

Unfortunately, both single and multi-member U.S. LLCs are recognized as foreign corporations under Canadian tax law. So, if you invest through a U.S. LLC, the LLC distributions would be considered foreign income that is not subject to a Canadian dividend tax credit or a foreign tax credit.

Thank you for choosing TurboTax.