Insights and Commentary from Dentons
|
|
- Ethan Harvey
- 5 years ago
- Views:
Transcription
1 dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more than 2,500 lawyers and professionals worldwide. This document was authored by representatives of one of the founding firms prior to our combination launch, and it continues to be Growing with offered to provide our clients with the information they need to do business in an increasingly complex, interconnected and competitive marketplace. The role of government has never been more critical
2 TOWER FINANCING: DEDUCTION DENIED BY MATTHEW PETERS
3 Taxpayers that have implemented cross border tower financing structures and that have claimed a Canadian tax deduction for any U.S. taxes paid should revisit their structures carefully in light of the Tax Court of Canada s recent decision in FLSMIDTH Ltd., v. The Queen (2012 TCC 3), which is the Court s first decision concerning tower structures. Tower structures of which several variations have evolved over the years have been used routinely by Canadian corporations to finance U.S. operations and by U.S. corporations to finance Canadian operations. Regardless of the variation, the principal tax benefit of a tower structure is the potential generation of two interest expenses within the cross border corporate group with generally only one corresponding income inclusion. The ability to double dip is achieved through a series of intercompany transactions involving hybrid entities that are characterized differently under the tax laws of Canada and the United States. Income earned, and paid, through these hybrid entities generally attracts different tax treatment in Canada and the U.S., which presents the opportunity in certain circumstances to use the same deduction for both Canadian and U.S. tax purposes. Certain tower structures have effectively been shut down by recent changes to the Canada US Tax Convention (the Treaty ); however, other variations continue to be used. Interestingly, the viability of the double interest deductions was not at issue in FLSMIDTH Ltd; rather, the issue was whether an additional deduction under subsection 20(12) of the Income Tax Act (Canada) (the Act ) was available in Canada with respect to U.S. income tax that was paid on income generated through the tower structure. Facts The relevant facts in this case are typical of many cross border tower financing structures that are still in use by Canadian corporations seeking to finance the operations of U.S. subsidiaries: 1. The taxpayer (through a predecessor Canadian corporation) established a U.S. entity ( Hybrid#1 ) that was treated as a partnership for Canadian tax purposes but as a corporation for U.S. tax purposes. The taxpayer held a significant majority interest in Hybrid#1. 2. Hybrid#1 borrowed money on an interest bearing basis (presumably from an arm s length financial institution) and used such funds to subscribe for shares of a Nova Scotia unlimited liability company ( Hybrid#2 ). Hybrid#2 was treated as a non resident corporation for Canadian tax purposes but as a disregarded entity for U.S. tax purposes. As described below, the interest paid by Hybrid#1 to the financial institution is the interest that generated the double deductions that are at the core of this tower structure, since this interest expense was deductible by Hybrid#1 in computing both its Canadian and U.S. federal income tax. 3. Hybrid#2 used the proceeds of the share subscription from Hybrid#1 to subscribe for shares of a U.S. limited liability company ( Hybrid#3 ), which was treated as a corporation for fmc law.com 1
4 Canadian tax purposes but as a disregarded entity for U.S. tax purposes. Hybrid#3 was a foreign affiliate of Hybrid#2 and the taxpayer for Canadian federal income tax purposes. 4. Hybrid#3 loaned money to U.S. operating subsidiaries of the taxpayer s corporate group and earned interest income in respect of such loans. 5. Hybrid#3 paid dividends to Hybrid#2 equal to the amount of interest it had received from the operating subsidiaries. 6. Hybrid#2 paid equivalent dividends to Hybrid#1. A simplified organizational chart is attached below. Taxpayer Financial Institution Hybrid #1 Hybrid #2 Hybrid #3 U.S. Operating Subsidiaries fmc law.com 2
5 These transactions gave rise to different tax consequences in Canada and in the U.S. For U.S. tax purposes, (i) the interest income received by Hybrid#3 was considered to have been received directly by Hybrid#1; (ii) the interest paid by Hybrid#1 to the financial institution was deducted by Hybrid#1; and (iii) the intercompany dividends paid by Hybrid#1 and Hybrid#2 were disregarded. Accordingly, only the spread between the interest received and the interest paid by Hybrid#1 was subject to U.S. federal income tax. For Canadian tax purposes, Hybrid#1 computed its income by including the dividends that it received from Hybrid#2 and by deducting (i) the interest that Hybrid#1 paid to the financial institution; and (ii) the amount of U.S. federal income tax paid by Hybrid#1 on its net interest income described above. The dividends received by Hybrid#2 from Hybrid#3 were exempt from Canadian income tax under Canada s foreign affiliate regime. Accordingly, the only amount of income that was subject to tax in Canada was the taxpayer s share of the net income earned by Hybrid#1. Issue The issue before the Court had nothing to do with the double dip i.e., the deduction by Hybrid#1 of the interest paid to the financial institution for both Canadian and U.S. tax purposes; rather, the sole issue was whether the taxpayer was entitled to a deduction pursuant to subsection 20(12) of the Act with respect to its share of the U.S. tax that was paid on the net interest income earned by Hybrid#1. Generally, the taxpayer would be entitled to the deduction under subsection 20(12) of the Act if two conditions were met: 1. Hybrid#1 must have paid the U.S. tax in respect of a source of income under the Act; and 2. the U.S. tax must not reasonably be regarded as having been paid in respect of income from the share of a capital stock of a foreign affiliate of the taxpayer. In Respect of a Source of Income under the Act On the first question, the Court reiterated the general legal principal that the words in respect of are words of the widest possible scope. In the context of subsection 20(12), this requires that there be some relationship or connection between the foreign tax and the income being computed under the Act. There was no dispute that Hybrid#1 paid U.S. tax in respect of the net interest income that it was considered to have received for U.S. tax purposes. However, there was also no dispute that Hybrid#1 s only source of income for purposes of the Act was its shares of Hybrid#2, on which it only received dividend income. On this basis, the Crown argued that for purposes of the Act dividend income was not the same source upon which the U.S. tax had been paid. The Court felt this interpretation was too narrow and held in favour of the taxpayer, noting the following at paragraph 46 of the decision: fmc law.com 3
6 the payment of the U.S. tax was related to or connected with the dividend income received by [Hybrid#1] from [Hybrid#2] because the indirect source of the dividend income received by [Hybrid#1] was the interest income received by [Hybrid#3] from [the U.S. operating subsidiaries] and the payment of the tax reduced the amount available to [Hybrid#2] that could be paid out to [Hybrid#1] as dividends. In other words, the U.S. tax was paid by Hybrid#1 in respect of the dividend income received by Hybrid#1 from Hybrid#2, even though it was not paid on that income. In Respect of Income from the Share of a Capital Stock of a Foreign Affiliate of the Taxpayer. While the Court s broad interpretation of the phrase in respect of assisted the taxpayer in satisfying the first question, it proved to be the demise of the taxpayer on the second. Recall the following facts: (i) the only source of income of Hybrid#1 was the shares it held in Hybrid#2; (ii) Hybrid#2 a Canadian corporation was not a foreign affiliate of the taxpayer; and (iii) the only income of Hybrid#1 was dividends received on the shares of Hybrid#2. Despite these facts, the Court was of the view that the U.S. tax paid by Hybrid#1 was connected with or related to the dividend income paid by Hybrid#3 to Hybrid#2 because it was paid on income that funded the payment of the dividends. Since Hybrid#3 was a foreign affiliate of the taxpayer, it was therefore reasonable to conclude that the U.S. tax paid by Hybrid#1 was in respect of income from the share of a capital stock of a foreign affiliate of the taxpayer. Treaty Relief The taxpayer also argued that the Treaty also provided a basis for the deduction; however, the Court concluded that no Treaty relief was required in the present circumstances. While Article XXIV(2) of the Treaty provides specific forms of relief from double taxation in certain circumstances, the Court noted that it does not require that Canada allow a deduction for all U.S. tax paid on income arising in the U.S. and that Canada s obligation does not go beyond providing relief from double taxation (i.e., the deduction is limited to Canadian tax payable in respect of that income). The Court stated the following at paragraph 81 of the decision: In the present case, neither the U.S. source income of [Hybrid#1] that was taxed in the U.S. (and which is not recognized as income of the limited partnership under Canadian law) nor the dividend income which was received by [Hybrid#1] from [Hybrid#2], and which flowed through to the partners including [the taxpayer], was taxed in Canada. Furthermore, the [Hybrid#3] dividends received by [Hybrid#2] (which were the source of the dividends paid by [Hybrid#2] to [Hybrid#1] were not taxed in Canada because they were paid out of the exempt surplus of [Hybrid#3]. On this basis, it seems clear that no fmc law.com 4
7 Conclusion Canadian tax was payable in respect of the dividends received by [Hybrid#1] from [Hybrid#2]. This decision provides a good review of the parameters concerning the availability of foreign tax credits and deductions for foreign tax, central to which is the broad interpretation that must be given to the phrase in respect of. Taxpayers that have implemented tower structures and that have claimed a subsection 20(12) deduction on any U.S. tax paid should revisit their structures and contact a tax advisor to discuss the potential implications of this case in their particular circumstances. At this time it is unclear whether the taxpayer will appeal this decision to the Federal Court of Appeal. fmc law.com 5
Insights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More informationInsights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More informationTax Court of Canada Shaves Benefits of Hybrid Entity Financing Structure
Volume 65, Number 6 February 6, 2012 Tax Court of Canada Shaves Benefits of Hybrid Entity Financing Structure by Nathan Boidman and Michael Kandev Reprinted from Tax Notes Int l, February 6, 2012, p. 455
More informationInsights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More informationInsights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More informationThe U.S. Canada Tax Treaty Protocol:
The U.S. Canada Tax Treaty Protocol: Impacts and Planning Opportunities Todd Miller Partner Federated Press: Cross-Border Personal Tax Planning May 21-22, 2013 The Canada US Tax Treaty Protocol: Impacts
More informationThe U.S. Canada Tax Treaty Protocol: Impacts and Planning Opportunities
The U.S. Canada Tax Treaty Protocol: Impacts and Planning Opportunities Todd Miller, Partner McMillan LLP Michael Domanski, Partner Honigman Miller Schwartz and Cohn LLP Federated Press: Tax Planning for
More information"BENEFICIAL OWNER" CRA'S ASSESSMENT OF VELCRO DOESN'T STICK BY MATTHEW PETERS
"BENEFICIAL OWNER" CRA'S ASSESSMENT OF VELCRO DOESN'T STICK BY MATTHEW PETERS The Tax Court has once again considered the meaning of the phrase beneficial owner for purposes of the tax treaty between Canada
More informationInsights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More informationNova Scotia Securities Commission. Rule Commodity Pools. -and- Multilateral Instrument Commodity Pools. -and-
Nova Scotia Securities Commission Rule 81-104 Commodity Pools Multilateral Instrument 81-104 Commodity Pools -and- -and- Companion Policy 81-104CP to Multilateral Instrument 81-104 Commodity Pools WHEREAS:
More informationThe Canada U.S. Tax Treaty Protocol: Impact and Planning Opportunities
The Canada U.S. Tax Treaty Protocol: Impact and Planning Opportunities Todd A. Miller, Partner McMillan LLP Michael Domanski, Partner Honigman Miller Schwartz and Cohn LLP Presented at: Federated Press:
More informationFLSMIDTH LTD. and HER MAJESTY THE QUEEN. Heard at Montréal, Quebec, on May 30, Judgment delivered at Ottawa, Ontario, June 18, 2013.
Date: 20130618 Docket: A-47-12 Citation: 2013 FCA 160 CORAM: NOËL J.A. TRUDEL J.A. MAINVILLE J.A. BETWEEN: FLSMIDTH LTD. Appellant and HER MAJESTY THE QUEEN Respondent Heard at Montréal, Quebec, on May
More informationJanuary 8, Dear Mr. Ernewein: Fifth Protocol
The Joint Committee on Taxation of The Canadian Bar Association and The Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants 277 Wellington St. W., Toronto Ontario,
More informationPartnerships and the Foreign Affiliate Regime
Partnerships and the Foreign Affiliate Regime John J. Tobin and Tony R. Vacca Presented at the Federated Press, Foreign Affiliates Conference, November 16, 2000 INTRODUCTION A Canadian corporation that
More informationTax Alert Canada. Federal Court of Appeal reaffirms the existence of common interest privilege outside a litigation context
2018 Issue No. 11 19 March 2018 Tax Alert Canada Federal Court of Appeal reaffirms the existence of common interest privilege outside a litigation context EY Tax Alerts cover significant tax news, developments
More informationSection 17 subsection 5 interconnected with section 18 of the Income Tax Act No. 595/2003 Coll. as amended (hereinafter the ITA )
Transfer Pricing Country Profile (to be posted on the OECD Internet site www.oecd.org/ctp/tp/countryprofiles) Name of Country: Slovak Republic Date of profile: October 2012 1. Reference to the Arm s Length
More informationTax Alert Canada. TCC dismisses appeal on transfer pricing reassessment of 2003 factoring transactions. Facts
2014 Issue No. 1 7 January 2014 Tax Alert Canada TCC dismisses appeal on transfer pricing reassessment of 2003 factoring transactions EY Tax Alerts cover significant tax news, developments and changes
More informationSHAREHOLDER LOANS PART II
SHAREHOLDER LOANS PART II This issue of the Legal Business Report provides current information on shareholder loans and case law developments relating to shareholder loans. Alpert Law Firm is experienced
More informationInsights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More informationCanada Tax Alert. FCA limits scope of foreign affiliate antiavoidance. Paragraph 95(6)(b) International Tax. 25 April 2014.
International Tax Canada Tax Alert Contacts Sandra Slaats sslaats@deloitte.ca 25 April 2014 FCA limits scope of foreign affiliate antiavoidance rule in Lehigh For many years, the Canada Revenue Agency
More informationThe relevant statutory regime
2017 Issue No. 24 05 June 2017 Tax Alert Canada FCA affirms release of trapped limited partnership losses in multi-tiered partnerships EY Tax Alerts cover significant tax news, developments and changes
More informationSTEP ISRAEL 20TH ANNUAL CONFERENCE DAN TEL AVIV HOTEL JUNE 19-20, 2018
STEP ISRAEL 20TH ANNUAL CONFERENCE DAN TEL AVIV HOTEL JUNE 19-20, 2018 CANADIAN TAX UPDATE June 10, 2018 Stephen S. Ruby Partner MULTILATERAL CONVENTION On May 28, 2018, Canada tabled a Notice of Ways
More informationIntellectual Property in Government Contracts Commercial data and software
Intellectual Property in Government Contracts Commercial data and software Michael J. McGuinn Jeremiah J. McIntyre III Joel M. Pratt McKenna Government Contracts, continuing excellence Agenda Review of
More informationCanada: Federal Court of Appeal reaffirms existence of common interest privilege outside a litigation context
20 March 2018 Global Tax Alert News from Americas Tax Center Canada: Federal Court of Appeal reaffirms existence of common interest privilege outside a litigation context EY Global Tax Alert Library The
More informationTAX EXECUTIVES INSTITUTE, INC. on PENDING CANADIAN INCOME TAX ISSUES Submitted to THE DEPARTMENT OF FINANCE November 19, 2014
TAX EXECUTIVES INSTITUTE, INC. on PENDING CANADIAN INCOME TAX ISSUES Submitted to THE DEPARTMENT OF FINANCE November 19, 2014 Tax Executives Institute welcomes the opportunity to present the following
More informationUnderstanding the Basic Building Blocks of the Canadian Foreign Affiliate Rules
Understanding the Basic Building Blocks of the Canadian Foreign Affiliate Rules Michael Friedman, McMillan LLP (Toronto) Andrew Stirling, McMillan LLP (Toronto) 25 th Foreign Affiliates Course Federated
More informationCanada: Limitation on the Elimination of Double Taxation Under the Canada-Brazil Income Tax Treaty
The Peter A. Allard School of Law Allard Research Commons Faculty Publications Faculty Publications 2017 Canada: Limitation on the Elimination of Double Taxation Under the Canada-Brazil Income Tax Treaty
More informationInsights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More information1. (1) Paragraph ( b ) of the definition outstanding debts to specified non-resi- dents in subsection 18(5) of the Income Tax Act
1 LEGISLATIVE PROPOSALS IN RESPECT OF FOREIGN AFFILIATES INCOME TAX ACT 1. (1) Paragraph (b) of the definition outstanding debts to specified non-residents in subsection 18(5) of the Income Tax Act is
More informationTAX UPDATE. By Marc G. Darmo and Gwendolyn G. Watson. The Advisory Panel on Canada s System of International Taxation released its Final Report:
March 2009 TAX UPDATE A report on cross-border developments in Canadian tax law Final Report of the Advisory Panel on Canada s System of International Taxation By Marc G. Darmo and Gwendolyn G. Watson
More informationCircling the Roundtable 2018
Circling the Roundtable 2018 Simon Lamarche PwC Shaira Nanji KPMG Law We d n e s d ay, J u n e 1 3, 2 0 1 8 Q1: New U.S. GILTI Tax One of the measures introduced under US tax reform is the global low-taxed
More informationCost Accounting Standards
Cost Accounting Standards Application of CAS and Modified CAS Coverage September 13, 2016 Agenda Introduction CAS applicability Exceptions to CAS Determining contract value for purposes of CAS Disclosure
More informationTax Executives Institute (Calgary) Transfer Pricing Update. Douglas Richardson May 30, 2017
Tax Executives Institute (Calgary) Transfer Pricing Update Douglas Richardson May 30, 2017 Transfer Pricing Update Overview Cameco Corporation v. The Queen, Court File No. 2009-2430(IT)G Chevron Australia
More informationDOWNSTREAM LOAN GUARANTEES AND SUBSECTION 247(7.1) TRANSFER PRICING RELIEF
September 12, 2013 Number 2166 DOWNSTREAM LOAN GUARANTEES AND SUBSECTION 247(7.1) TRANSFER PRICING RELIEF Geoffrey S. Turner, Davies Ward Phillips & Vineberg LLP Canadian-based multinationals generally
More informationCrossing Borders: International Acquisitions and Related Tax Issues, 2nd Edition John Giakoumakis, B.Sc., M.A., C.A., C.P.A.
PREFACE TO THE 2nd EDITION ACKNOWLEDGEMENTS TO THE 2nd EDITION 1 THE ACQUISITION AND THE ROLE OF TAXES 1.1 INTRODUCTION AND PURPOSE 1.2 THE ACQUISITION TRANSACTION STAGES AND TAXES 1.3 THE MULTIDISCIPLINARY
More informationAdvance Pricing Agreements in India - Addressing the taxpayers needs
Advance Pricing Agreements in India - Addressing the taxpayers needs Transfer pricing (TP) the means by which income is allocated between taxing jurisdictions has emerged as the preeminent international
More informationTax Executives Institute (Calgary) May 30, 2017 Julie D Avignon
Transfer Pricing Update Imputing Transactions & the Appropriateness of Guarantee Fees Tax Executives Institute (Calgary) May 30, 2017 Julie D Avignon 707917 MAY 30, 2017 Today s Topics Appeals from Transfer
More informationTax Alert Canada. Changes to income tax VDP revised. Overview
2017 Issue No. 53 19 December 2017 Tax Alert Canada Changes to income tax VDP revised EY Tax Alerts cover significant tax news, developments and changes in legislation that affect Canadian businesses.
More informationCost Accounting Standards: Overview and Best Practices
Cost Accounting Standards: Overview and Best Practices Joseph G. Martinez K. Tyler Thomas October 10, 2017 Agenda Introduction to the Cost Accounting Standards ("CAS") Overview/Fundamental Requirements
More informationAPPLICATION AND INTERPRETATION OF ARTICLE 24 (NON-DISCRIMINATION) Public discussion draft. 3 May 2007
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT APPLICATION AND INTERPRETATION OF ARTICLE 24 (NON-DISCRIMINATION) Public discussion draft 3 May 2007 CENTRE FOR TAX POLICY AND ADMINISTRATION 1 3
More informationCraig Burley, Barrister and Solicitor
New Developments in Small Business Taxation Budget 2016 and recent developments Craig Burley, Barrister and Solicitor Before the release of new draft legislation on Monday afternoon, I had planned to discuss
More informationTO: Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA
TO: Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA Electronic transmission: taxtreaties@oecd.org 3 February 2017 Comments on the OECD Public Discussion Draft BEPS Action
More informationCanada Revenue Agency revises income tax Voluntary Disclosures Program
20 December 2017 Global Tax Alert News from Americas Tax Center Canada Revenue Agency revises income tax Voluntary Disclosures Program EY Global Tax Alert Library The EY Americas Tax Center brings together
More informationand HER MAJESTY THE QUEEN, Appeal heard on October 23, 2013, at Halifax, Nova Scotia By: The Honourable Justice Campbell J.
BETWEEN: WARD CARSON, and HER MAJESTY THE QUEEN, Docket: 2011-1382(IT)I Appellant, Respondent. Appeal heard on October 23, 2013, at Halifax, Nova Scotia Appearances: By: The Honourable Justice Campbell
More informationFinance Comfort Letter on the 95(2)(f) and (f.1) FAPI Accrual Rules A Comment on its Implications for the Tax Cost Bump. by Geoffrey S.
Finance Comfort Letter on the 95(2)(f) and (f.1) FAPI Accrual Rules A Comment on its Implications for the Tax Cost Bump by Geoffrey S. Turner Davies Ward Phillips & Vineberg LLP Citation: Geoffrey S. Turner,
More informationCompanion Policy Commodity Pools. 2.1 Relationship to securities legislation applicable to mutual funds 2.2 Derivatives use
Companion Policy 81-104 Commodity Pools PART 1 PURPOSE AND BACKGROUND 1.1 Purpose 1.2 What the Instrument covers 1.3 Background to the Instrument 1.4 Regulatory principles for commodity pools PART 2 GENERAL
More informationContents. Application. INCOME TAX ACT Determination of an Individual s Residence Status
NO.: IT-221R3 (Consolidated) DATE: See Bulletin Revisions section SUBJECT: REFERENCE: INCOME TAX ACT Determination of an Individual s Residence Status Sections 2 and 250 (also sections 114, 115, 128.1
More informationVelcro Canada Inc. v. The Queen: Riding Prévost Car to Victory... 1
In This Issue Velcro Canada Inc. v. The Queen: Riding Prévost Car to Victory... 1 More on FATCA and More to Come: The Internal Revenue Service and Treasury Department Release Proposed Regulations... 4
More informationThe Foreign Affiliate System. Robert Raizenne June 2, 2011
The Foreign Affiliate System Robert Raizenne June 2, 2011 3453191 The Legislative Scheme Subdivision (i) of Division B of Part I Section 90 Dividend received inclusion Sections 91 and 92 FAPI rules Section
More informationTax Alert Canada. Teletech decision exposes potential pitfalls in obtaining double tax relief. Background
2013 Issue No. 35 29 July 2013 Tax Alert Canada Teletech decision exposes potential pitfalls in obtaining double tax relief EY Tax Alerts cover significant tax news, developments and changes in legislation
More informationAdverse Canada-U.S. Tax Treaty Hybrid Entity Rules Coming into Effect January 1, 2010
Update page 1 Adverse Canada-U.S. Tax Treaty Hybrid Entity Rules Coming into Effect January 1, 2010 New rules in the Canada-United States Income Tax Convention (Treaty) will deny treaty benefits for many
More informationBEPS Targets Commonly Used Canada-U.S. Hybrid Structures
BEPS Targets Commonly Used Canada-U.S. Hybrid Structures Abraham Leitner aleitner@dwpv.com Reprinted from Tax Notes Int l Tax Analysts (2015) www.dwpv.com Volume 77, Number 6 February 9, 2015 BEPS Targets
More informationThough funds are generally exempt from profits tax in Hong
Tax Law: Latest Developments in the Taxation of Hong Kong Asset Managers As Hong Kong proposes new rules to combat base erosion and profit shifting ( BEPS ), asset management groups operating in Hong Kong
More informationUS-Canada Tax Strategies for US Entities Expanding to Canada
US-Canada Tax Strategies for US Entities Expanding to Canada Allinial Global Summit Conference Charleston, SC November 17, 2015 Bill Macaulay, CPA, CA Expanding Business into Canada Overview Key issues
More informationTAX EXECUTIVES INSTITUTE, INC. INCOME TAX QUESTIONS. Submitted to DEPARTMENT OF FINANCE DECEMBER 6, 2017
TAX EXECUTIVES INSTITUTE, INC. INCOME TAX QUESTIONS Submitted to DEPARTMENT OF FINANCE DECEMBER 6, 2017 Tax Executives Institute Inc. ( TEI or the Institute ) welcomes the opportunity to present the following
More informationPCI Financial Forum Compensation Cost Allowability: Select Compensation Costs
PCI Financial Forum Compensation Cost Allowability: Select Compensation Costs May 3, 2016 Steven M. Masiello Gale R. Monahan Agenda Compensation Cost Allowability Overview Trends and Issues Specific Compensation
More informationTHE HIGH COURT DECISION IN SMALLWOOD. Philip Baker
THE HIGH COURT DECISION IN SMALLWOOD Philip Baker On 8 th April 2009 the High Court overturned the decision of the Special Commissioners in the case of Smallwood and Others v Commissioners for Her Majesty
More informationTax Alert Canada. Proposed changes to section 55. Background. Current section 55
2015 Issue No. 35 8 June 2015 Tax Alert Canada Proposed changes to section 55 EY Tax Alerts cover significant tax news, developments and changes in legislation that affect Canadian businesses. They act
More informationSection 894. Income Affected by Treaty
46876, 46877) under section 894 of the Code relating to eligibility for benefits under income tax treaties for payments to entities. A notice of proposed rulemaking (REG 104893 97, 1997 2 C.B. 646) cross-referencing
More informationTax Alert Canada. Intra-group services and section 247 of the Income Tax Act
2015 Issue No. 16 3 March 2015 Tax Alert Canada Intra-group services and section 247 of the Income Tax Act EY Tax Alerts cover significant tax news, developments and changes in legislation that affect
More information2017 Transfer Pricing Overview Slovakia
2017 Transfer Pricing Overview Slovakia slovakia@accace.com www.accace.com www.accace.sk Contents Introduction 3 Applicable legislation 4 Arm s length principle 5 Applicability 5 General terms 5 Documentation
More informationTAX LAW BULLETIN CENTRAL MANAGEMENT AND CONTROL DETERMINES TRUST RESIDENCE SEPTEMBER Facts. By Elinore Richardson and Stephanie Wong
SEPTEMBER 2009 CENTRAL MANAGEMENT AND CONTROL DETERMINES TRUST RESIDENCE By Elinore Richardson and Stephanie Wong In Garron, M. et al. v. The Queen, 1 the Tax Court of Canada considered whether two Barbados
More informationEU Anti-Tax Avoidance Directive 2: hybrid mismatches with third countries
EU Anti-Tax Avoidance Directive 2: hybrid mismatches with third countries On February 21, 2017 the EU Member States reached agreement on a Directive that will amend the Anti-Tax Avoidance Directive (Council
More informationWhen Do the Stop-Loss Rules Apply? Transactions Involving Foreign Affiliates After the 2012 Technical Bill
canadian tax journal / revue fiscale canadienne (2016) 64:3, 561-600 When Do the Stop-Loss Rules Apply? Transactions Involving Foreign Affiliates After the 2012 Technical Bill Jim Samuel* PRÉCIS Le projet
More informationSubsection 55(2) is an anti-avoidance rule intended to prevent the inappropriate reduction of a capital gain by way of the payment of a deductible
1 2 Subsection 55(2) is an anti-avoidance rule intended to prevent the inappropriate reduction of a capital gain by way of the payment of a deductible intercorporate dividend. This provision generally
More informationInternational Tax Primer. Third Edition. Brian J. Arnold
International Tax Primer Third Edition Brian J. Arnold Wolters Kluwer Preface xi CHARTER 1 Introduction 1 1.1 Objectives of This Primer 1 1.2 What Is International Tax? 2 1.3 Goals of International Tax
More informationPRE-2011 STOCK OPTIONS ELECTION DEADLINE MAY BE APRIL 30
MARCIL LAVALLÉE Tax Letter Marcil Lavallée March 2011 In this issue: PRE-2011 STOCK OPTIONS ELECTION DEADLINE MAY BE APRIL 30 CAPITAL GAINS OR INCOME? HIGH TAXES ON MODEST EMPLOYMENT INCOME COURT CASES
More informationRelated Member Interest Expenses and Costs; and Intangible Expenses and Costs.
560-7-3-.05 Related Member Interest Expenses and Costs; and Intangible Expenses and Costs. (1) Purpose. The purpose of this regulation is to provide guidance with regard to the administration of O.C.G.A.
More informationApril 21, 2015 CPA CANADA FEDERAL BUDGET COMMENTARY
April 21, 2015 CPA CANADA FEDERAL BUDGET COMMENTARY TABLE OF CONTENTS BUSINESS INCOME TAX MEASURES... 4 Reduced Small Business Tax Rate... 4 Dividend Tax Credit (DTC) Adjustment for Non-eligible Dividends...
More informationGlobal Tax Alert. OECD releases report under BEPS Action 2 on hybrid mismatch arrangements. Executive summary
23 September 2014 EY Library Access both online and pdf versions of all EY Global Tax Alerts. Copy into your web browser: http://www.ey.com/gl/en/ Services/Tax/International- Tax/Tax-alert-library#date
More informationEmigration from Canada: Tax Implications
Emigration from Canada: Tax Implications Introduction Liability for tax under the Canadian income tax system is based on residency. Neither the concept of residency, nor the notion of termination of Canadian
More informationInternational Tax Planning
canadian tax journal / revue fiscale canadienne (2014) 62:3, 835-56 International Tax Planning Co-Editors: Michael Maikawa* and Ken Buttenham** Estate Planning: US-Resident Beneficiaries of a Canadian
More informationCourse-Level Assessment Project: Computation of Taxes Payable and Providing Tax Planning Advice to a Corporate Client
Course Description This course builds on concepts learned in introductory financial accounting and microeconomics and in the study of the fundamentals of the Canadian Income Tax System with respect to
More informationQUESTIONNAIRE ON THE TREATMENT OF INTEREST PAYMENTS AND RELATED TAX BASE EROSION ISSUES
QUESTIONNAIRE ON THE TREATMENT OF INTEREST PAYMENTS AND RELATED TAX BASE EROSION ISSUES This questionnaire should be completed by participants in United Nations capacity development programs on protecting
More informationInsights and Commentary from Dentons
dentons.com Insights and Commentary from Dentons On March 31, 2013, three pre-eminent law firms Salans, Fraser Milner Casgrain, and SNR Denton combined to form Dentons, a Top 10 global law firm with more
More informationTAX LAW BULLETIN U.S. SENATE RATIFIES FIFTH PROTOCOL. TRANSPARENT ENTITIES BEWARE! By Elinore Richardson and Stephanie Wong, Borden Ladner Gervais LLP
OCTOBER 2008 U.S. SENATE RATIFIES FIFTH PROTOCOL TO TREATY WITH CANADA: FISCALLY TRANSPARENT ENTITIES BEWARE! By Elinore Richardson and Stephanie Wong, Borden Ladner Gervais LLP TAX LAW BULLETIN www.blgcanada.com
More informationTax Alert Canada. TCC rejects mark-to-market accounting for option contracts. The decision
2015 Issue No. 42 24 June 2015 Tax Alert Canada TCC rejects mark-to-market accounting for option contracts EY Tax Alerts cover significant tax news, developments and changes in legislation that affect
More information2017 UK TAX STRATEGY. Formica UK Group
2017 UK TAX STRATEGY Formica UK Group CONTENTS 1. Introduction 2. Tax policy, tax strategy and governance 3. International related party dealings I am pleased to present Formica UK s Tax Strategy in respect
More informationEXPLANATORY NOTES - FOREIGN AFFILIATE AMENDMENTS
Page 1 EXPLANATORY NOTES - FOREIGN AFFILIATE AMENDMENTS Overview Various provisions of the Income Tax Act (the Act ) and Income Tax Regulations (the Regulations ) that deal with foreign affiliates of taxpayers
More informationBEPS ACTION 2: NEUTRALISE THE EFFECTS OF HYBRID MISMATCH ARRANGEMENTS
Public Discussion Draft BEPS ACTION 2: NEUTRALISE THE EFFECTS OF HYBRID MISMATCH ARRANGEMENTS (Treaty Issues) 19 March 2014 2 May 2014 Comments on this note should be sent electronically (in Word format)
More informationIssue One Americas Region and PKF NAN February Chairman s Note
Issue One Americas Region and PKF NAN February 2009 Chairman s Note Welcome to the first edition of the PKF International Tax Alert, a publication designed to summarise key tax changes from around the
More informationCEO Confidence Index Q A quarterly survey measuring the confidence of Canadian business leaders of small-to-medium enterprises.
TEC Canada CEO Confidence Index / Q4 2018 1 /9 CEO Confidence Index A quarterly survey measuring the confidence of Canadian business leaders of small-to-medium enterprises. Q4 2018 TEC Canada CEO Confidence
More informationNATIONAL BANK OF CANADA. NBC Auto Callable Note Securities (no direct currency exposure; price return) Program
This Pricing Supplement (the Pricing Supplement ) together with the short form base shelf prospectus dated July 4, 2016, as amended or supplemented (the Prospectus ) and the Prospectus Supplement thereto
More informationState Tax Return. A Federal Treaty and Approximately $2.00 Will Get You A Ride on the New York Subway
April 2008 State Tax Return Volume 15 Number 2 Peter Leonardis New York (212) 326-3770 A Federal Treaty and Approximately $2.00 Will Get You A Ride on the New York Subway Tax directors of corporations
More informationUnited Kingdom diverted profits tax now in effect
United Kingdom diverted profits tax now in effect Diverted profits tax (DPT) applies at a rate of 25% from 1 April 2015 to profits of multinationals that are considered to have been artificially diverted
More informationCanada Releases Foreign Affiliate Dumping Amendments
Volume 71, Number 10 September 2, 2013 Canada Releases Foreign Affiliate Dumping Amendments by Steve Suarez Reprinted from Tax Notes Int l, September 2, 2013, p. 864 Reprinted from Tax Notes Int l, September
More informationCEDIF OFFERING DOCUMENT
1a. How long will the application process take from the submission of the documents until receiving a letter of non-objection from the Director of Securities? The length of time varies widely between applicants
More informationVOLUME 13, NUMBER 6 >>> JUNE 2015
VOLUME 13, NUMBER 6 >>> JUNE 2015 Reproduced with permission from Tax Planning International Indirect Taxes, 13 IDTX, 6/30/15. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
More informationLaw 410/565 International Taxation Spring 2016
Law 410/565 International Taxation Spring 2016 Tuesdays & Thursdays 9:00 am 10:30 am Allard Hall, Room B101 PROFESSOR DAVID DUFF T: (604) 827-3586 E: duff@allard.ubc.ca Office: Allard Hall, Room 466 Office
More informationTax Alert Canada. Tax Court of Canada finds for the taxpayer in Cameco transfer pricing case Cameco Corporation v The Queen, 2018 TCC 195
2018 Issue No. 33 2 October 2018 Tax Alert Canada Tax Court of Canada finds for the taxpayer in Cameco transfer pricing case Cameco Corporation v The Queen, 2018 TCC 195 EY Tax Alerts cover significant
More informationINBOUND INVESTMENT - CROSS-BORDER ISSUES
INBOUND INVESTMENT - CROSS-BORDER ISSUES Taxation of Non-Residents Property Income Christopher Steeves, Fasken Martineau DuMoulin LLP Intercompany Pricing Rules Blake Murray, Osler, Hoskin & Harcourt LLP
More informationBEPS Action 12: Mandatory disclosure rules Response by the Chartered Institute of Taxation
BEPS Action 12: Mandatory disclosure rules Response by the Chartered Institute of Taxation 1 Introduction 1.1 The Chartered Institute of Taxation (CIOT) is pleased to respond to the Public discussion draft
More informationTable of Contents. General Information INCOME TAX INFORMATION CIRCULAR
INCOME TAX INFORMATION CIRCULAR NO.: IC72-17R6 DATE: September 29, 2011 SUBJECT: Procedures concerning the disposition of taxable Canadian property by non-residents of Canada Section 116 This version is
More informationTABLE OF CONTENTS. Table of Cases... Cases-i Introduction...I-1
TABLE OF CONTENTS Table of Cases... Cases-i Introduction...I-1 Chapter 1: History of Mutual Funds 1.1 Introduction... 1-1 1.2 Joint-Stock Companies and Deed of Trust Companies 1600s... 1-1 1.2.1 The Emergence
More informationCompetent Authority Resolutions and APAs
Competent Authority Resolutions and APAs Tom Akin Senior Partner, McCarthy Tétrault LLP, Toronto Patricia Spice - Director, Competent Authority Services Division, CRA, Ottawa Introduction 2 A taxpayer
More informationCanadian Health Insurance
Case study Canadian Health Insurance TAX GUIDE ADVISOR USE ONLY Shared ownership of critical illness insurance November 2014 Life s brighter under the sun Sun Life Assurance Company of Canada is a member
More informationOECD REITs Report and Model Convention Update. Luis Nouel, IBFD Amsterdam
OECD REITs Report and Model Convention Update Luis Nouel, IBFD Amsterdam Agenda Treaty entitlement of REITS Distributions Capital gains Cross-border situations General characteristics of REITs REITS varies
More informationContents. Introduction. International Transfer Pricing: Advance Pricing Arrangements (APAs)
NO.: 94-4R DATE: March 16, 2001 SUBJECT: International Transfer Pricing: Advance Pricing Arrangements (APAs) This circular cancels and replaces Information Circular 94-4, dated December 30, 1994. This
More informationTAX LAW BULLETIN PRIMER ON TRANSFER PRICING AUDITS MARCH 2012
MARCH 2012 PRIMER ON TRANSFER PRICING AUDITS TAX LAW BULLETIN Transfer pricing attracts a lot of attention from tax authorities, generally because large amounts are often involved and most countries are
More information66 th Annual Tax Conference Vancouver 2014
Construction Projects Shane Onufrechuk KPMG Warren Pashkowich EY 66 th Annual Tax Conference Vancouver 2014 MCPs West Coast Style > Overview of the BC LNG Opportunity > Structuring alternatives > Financing
More information