For Canadian businesses exploring the establishment of a U.S. subsidiary to mitigate potential U.S. tariffs, making strategic decisions is essential. The long-term success of this approach depends on a comprehensive evaluation of key factors—from labour disruptions to fluctuating exchange rates to complex tax implications. Poorly planned moves can lead to financial inefficiencies, compliance risks, and unintended tax consequences.
Business can navigate these challenges effectively with a well-informed strategy that integrates customs valuation and transfer pricing considerations. Aligning these elements not only ensures regulatory compliance but also strengthens operational resilience. A strategic approach will help businesses withstand scrutiny from U.S. Customs and Border Protection (CBP), the U.S. Internal Revenue Service (IRS), and the Canada Revenue Agency (CRA), while also preparing for potential Canadian reciprocal and/or retaliatory tariffs enforced by the Canada Border Services Agency (CBSA).
By proactively addressing these factors, Canadian businesses can make informed decisions that support long-term growth and regulatory confidence. Some vital components of this proactive approach can include:
Different valuation methods
Adjustments reporting
Intercompany charges
Supply Chain Assessment
Duty Drawback Programs
Annual review
Valuation impact
Documentation
We can help you with a tailored solution that is best for your business including your customs and transfer pricing policies.
The information in this publication is current as of February 24, 2025.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.