Tax implications for Prop trading from Canada and India.

Discussion in 'Taxes and Accounting' started by kcgoogler, Oct 19, 2011.

  1. Hello Traders,

    Quick question; anybody knows the tax implications of trading US securities via prop while living in Canada and India.

    More info: i wont be having a US SSN or tax id because i am not a citizen; but wonder if i have to pay taxes in both countries or only one?

    As for firms, i think CBSX firms are not viable but the ones requiring series7 allow you to trade from outside the country.

  2. mickmak


    I asked this question awhile back regarding trading from captial gain tax free countries - such as singapore. not really any good answers here.
  3. Oh that would be a great advantage. But i am not looking for tax havens but these two countries in particular as i *might* move there and was trying to understand the tax implications.

    India, i can understand - no one trading prop from there.

    But Canada - there must be folks trading prop using US firms from Canada. What do you guys do for taxes? pay in both countries? specially say you dont have US citizenship - are you still liable for US taxes?
  4. delta2715


    in india you pay the income tax the money,that is:) :p :p :p
  5. mickmak


    Not sure, I recommend you speak with a tax consultant. But I believe as long as you make money under your identity, it is taxable by US. Uncle Sam will adjust base on what the other country taxed.

    I was only looking from a tax haven perspective. :D Setup a company in Singapore with a Singapore id. Trade under that ID. Leave the funds overseas tax free. Whenever the idiots in congress pass a repreive to move money back into US, then you can move your money back along with all the Fortune 500 companies that have decided to park money overseas. :)
  6. sandman55


    Your taxation in Canada will depend on the type of legal relationship you have with the prop trading firm (e.g. employment, partnership, shareholder etc).

    You are not required to pay U.S. taxes if you are not a U.S. citizen and trading U.S. equities from Canada regardless if you are making gains or dividends as far as I know, unless you have a relevant shareholding (which you probably won't) and in certain scenarios only.

    In Canada you are taxable on the 50% of the capital gains or 100% on the income. If you are trading it's likely it will all qualify as business income, so 100% on NET income is taxable at whatever rate applies to you. This changes if your payout is part of an "employment contract" where all would be employment income, fully taxable.

    Good luck