Читать книгу Buying a Franchise in Canada - Tony Wilson - Страница 23

It is important that the US franchisor (or any other non-Canadian franchisor) understands that the Canadian franchisee has an obligation to deduct withholding taxes on the royalties and similar monies owed to the non-Canadian franchisor and remit them to Canada Revenue Agency (CRA). Withholding tax requirements are in place to make sure that the taxes are paid before the funds are paid to the non-Canadian franchisor. As a franchisee, you are required to withhold approximately 15 percent of the royalties or other payments to the franchisor and send them to the CRA.

Should you, as the franchisee, have to pay more than the stipulated amount of royalties just because the franchisor did not contemplate that withholding taxes would have to be paid? After all, the non-Canadian franchisor could have created a Canadian subsidiary and effectively avoided this problem.

The US-based franchisor will always take the position that you, the franchisee, are responsible for paying the withholding tax. The addition of this extra tax might not make the venture ecomonic for you. CRA will assess you, the franchisee, in the event the withholding tax is not paid. This is an important issue to address with all non-Canadian franchisors and should be resolved before you sign the agreement.