🌱 Origin Series #7 : Canada & U.S.- A Tax Tale of Two Countries “Same border, different worlds.”

At first glance, Canada and the U.S. seem like siblings— same Netflix, same coffee chains, same obsession with weather.

But when it comes to tax philosophy, the two countries couldn’t be more different.

Let me explain:

Canada: Residency-Based Taxation

Canada wants to know: “Where do you live?”

Your tax home is based on residency, which means your ties:

🏠 Home

📍 Location of family

💼 Employment

🪪 Immigration status

If you live in Canada, the CRA wants to tax you on your worldwide income.

Leave Canada, sever ties? You may stop being taxable on everything, too.

United States: Citizenship-Based Taxation

The U.S. asks: “Are you one of us?”

If you’re a U.S. citizen, you’re taxed on your worldwide income— no matter where you live.

Even if you haven’t set foot in the U.S. for years.

Even if you’re a dual citizen living in Vancouver, running a Canadian business, and paying Canadian tax.

And it doesn’t stop at individuals.

U.S. tax also extends its reach to foreign corporations with U.S. shareholders, U.S.-sourced income, and more.

🧭 Why does this matter?

If you’re a Canadian entrepreneur expanding into the U.S., or a U.S. citizen living north of the border, these tax philosophies directly shape your strategy:

✔️ Structuring your business

✔️ Withholding tax on cross-border payments

✔️ Disclosure & reporting obligations

✔️ Exit planning when selling your business

The bottom line?

Two countries, two systems -

and your tax outcome depends on understanding both.