USA Canadian company paying US bills

[ttreacy]

Good Morning,

The US company I work for has acquired a company located in Canada, which will be run on its' own only consolidating financials into the parent company for Financial Reporting purposes. My question is, what would be the "best way" for this Canadian subsidiary to pay US Invoices?

Is it possible for the Canadian subsidiary to cut a check in CAD from their Canadian bank account and have its US vendor make the conversion to USD
or
The Canadian subsidiary convert the invoice to UAD before cutting the check, hitting a Gain/loss on Exchange account for the difference?
or
The US parent company pay the US Invoice & have the Canadian subsidiary pay the US Parent company - hitting a Gain/Loss on Exchange for the difference.

We don't anticipate there to be many US invoices for this Canadian Subsidiary, but there is the possibility. Just looking for the best route to process US vendor payments from a Canadian subsidiary company as this is new territory.

Any help/insight would be greatly appreciated.

 

[kirby]

I suggest first having your tax folks review the Canadian HST exposure and guide your decision accordingly. Then make arrangements to be sure to file the US FBAR timely.