I need to make a payment to a foreign contractor who provided services to me (self-employed).
1. Do I need to issue any form to this foreign contractor? (Job performed outside of Canada, a contractor is not a resident of Canada)
2. Is there a limit for payment to foreign contractors?
3. Can I pay in cash or via payPal?
If you are self-employed, and have a business registered in Canada, you can input contract work in expenses.
1. Please contact CRA to verify because if the foreign country has a tax agreement with Canada, you ight have to provide a T4A
2. Payment agreement depends on the verbal or written contract you have with the foreign worker. A written contract is always preferable.
3. As a business owner (self-employed) it not advisable to pay cash unless you get a thorough receipt with name, address, work done, etc....
This is a complicated issue and you should verify with Canada Revenue Agency to insure a complete and appropriate return. Here are 2 links to help you:
How to complete a T2125 Statement of Business
CRA Business Enquiries line at: 1-800-959-5525
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