Choose The Right Lease

Customers may choose a new rail car lease agreement with Procor Limited, Procor Alberta Inc., or UTLX International. Choosing the "right lease" is dependent on where the rail cars will be used and whether a U.S. company or a Canadian company is earning income from operating the rail cars. Subsequent changes in use of the rail car will have tax consequences to the lessee.

Procor or Procor Alberta Inc. Lease

A Procor or Procor Alberta Inc. lease works best for a Canadian customer that earns income from the operation of the rail cars, and the cars are used in Canadian Domestic or International service. The rail cars will be imported for use in Canada by Procor or Procor Alberta Inc. Provincial sales taxes are applicable. Should a U.S. affiliate use the cars to earn income, the lessee would be exposed to various potential tax consequences.

Potential Tax Consequences

  • Income tax rules require that a sublease be created between the lessee's Canadian and U.S. companies.
  • Withholding tax is payable and may not be recoverable on cars spending over 50% of time in the U.S.
  • Transfer pricing considerations and reporting are required for the cross border lease.
  • Additional costs are incurred for record keeping, audits and professional advice.

UTLX International Lease

A UTLX International lease works best for a U.S. customer that earns income from the operation of the rail cars, and the cars are used in U.S. Domestic or International service. Should Canadian affiliates use the cars to earn income, the lessee would be exposed to various potential tax consequences.

Potential Tax Consequences

  • Income tax rules require that a sublease be created between the lessee's U.S. and Canadian companies.
  • Withholding tax is payable and may not be recoverable on cars spending over 50% of time in Canada.
  • GST may be payable on lease invoices.
  • GST will be payable based on the lease rate if cars operate in Canadian Domestic service for less than 90 days in any year, and must be imported and GST paid on the fair market value of the rail car if over 90 days.
  • Transfer pricing considerations and reporting are required for the cross border lease.
  • Provincial sales taxes are applicable on the lease payment on a miles in PST province/total miles basis.
  • Additional costs are incurred for record keeping, audits and professional advice.

To Request Additional Information:

New Customers:

Tel: 1-888-977-6267 or
Email: enquiry@procor.com

Existing Customers:

Eastern Canada Sales: 905-847-0072
Western Canada Sales: 403-264-1773

Procor will structure a lease to best meet your needs.

Where the rail cars are used is a key consideration.