Tax Court Lowers Canco s AR Factoring Transfer Price

Size: px
Start display at page:

Download "Tax Court Lowers Canco s AR Factoring Transfer Price"

Transcription

1 Tax Court Lowers Canco s AR Factoring Transfer Price January 20, 2014 No Canadian multinational companies may want to note the implications of the recent transfer pricing case McKesson Canada Corp. v. The Queen (2013 TCC 404), in which the Tax Court of Canada (TCC) found in favour of the CRA concerning what constitutes a reasonable discount rate in a non- arm s-length accounts receivable factoring arrangement and upheld the $27 million increase in the Canadian taxpayer s income for its 2003 taxation year. Although the taxpayer has appealed this decision to the Federal Court of Appeal (FCA), multinationals will be interested in the approach the TCC used in determining what it considers an acceptable arm s length range for an accounts receivable factoring discount. Further, the TCC s decision to apply Canadian withholding tax on the secondary adjustment in this case is important for both Canadian taxpayers and non-residents engaged in crossborder controlled transactions. Finally, the TCC made some interesting observations in obiter on why the courts should not be influenced by the tax morality debate currently taking place around the world in rendering judgments on transfer pricing matters. Facts of the case In 2002, McKesson Canada (Canco), a Canadian health care corporation, entered into a five-year Receivables Sale Agreement (RSA) to sell all eligible trade receivables to its Luxembourg parent company (Luxco). Both entities were indirect subsidiaries of a U.S. multinational. Luxco agreed to purchase all of Canco s eligible receivables daily as they arose for the next five years, in addition to a one-time purchase of $460 million in upfront receivables. Generally, the receivables consisted of trade receivables from arm s-length customers not in default. The RSA provided for certain termination events, and Canco did not warrant or guarantee the collectability of the receivables or any portion thereof. Canco sold receivables to Luxco for an amount equal to the face amount of the receivables, discounted by a factor of 2.206% for the 2003 taxation year. Canco deducted the discount as a financing charge in 2003, inclusive of the discount applied to the upfront receivables transfer. Page 1 of 5

2 The CRA challenged the discount rate as greater than the amount which would have been agreed between persons dealing at arm s length. Accordingly, the CRA reduced the discount rate to 1.013%, thereby increasing Canco s 2003 taxable income by $27 million. The parties also entered into a Servicing Agreement, where Canco would service the receivables for a fixed annual fee of $9.6 million. The Servicing Agreement was not contested by the CRA, although it was referenced in the TCC s reasons for judgment. In addition, the CRA issued a consequential assessment on Canco for failure to withhold Part XIII withholding tax (i.e., a secondary adjustment). The CRA assessed Part XIII withholding tax of 5% on the disallowed amount of the original discount as, under Canadian tax law, the disallowed amount is deemed a dividend paid by Canco to Luxco. Summary of the TCC s decision The TCC found in favour of the CRA that the 2.206% discount rate applied to Canco s sale of trade accounts receivables to Luxco was in excess of what would have been agreed to by arm s-length parties. As a result, the TCC s Honourable Justice Patrick J. Boyle upheld the CRA s transfer pricing reassessment that increased the taxpayer s taxable income by approximately $27 million in 2003 (a short three-month taxation year). In its decision, the TCC computed its own range of acceptable discount rates, using a formula generally advocated by both parties. The CRA s proposed discount rate (1.013%) was within this range but Canco s discount rate of 2.206%, however, fell outside the acceptable range as determined by the TCC. The TCC also decided in favour of the CRA on the secondary matter of the taxpayer s obligation to withhold tax on the deemed dividend, a secondary adjustment resulting from the (primary) transfer pricing adjustment to the discount rate. While Canadian domestic law contains no statute of limitations for Part XIII withholding tax, the taxpayer argued that Article 9 of the Canada-Luxembourg Income Tax Treaty (Treaty) restricted the CRA s ability to assess withholding tax after five years from the end of the taxation year to which the adjustment relates. The TCC decided that the wording in Article 9 of the Treaty does not extend to Canadian taxpayers obligations to have withheld tax on a deemed dividend. This case, the latest Canadian court decision in the realm of transfer pricing, was found in favour of the CRA even though other recent Canadian transfer pricing cases were decided in favour of the taxpayer (General Electric Capital Canada Inc. (FCA) and Alberta Printed Circuit Ltd. (TCC)). In GlaxoSmithKline Inc., the Supreme Court of Canada referred the case back to the TCC for retrial (see KPMG s TaxNewsFlash-Canada , GlaxoSmithKline Inc. Supreme Court Sends Transfer Pricing Dispute Back to Square One ). Page 2 of 5

3 Details of the TCC s decision Discount rate The TCC agreed that the formula to determine the discount rate comprised three main components: 1 Yield Rate (reflecting the financing aspect) 2 Loss Discount (reflecting the credit risk of Canco s customers whose receivables were covered by the RSA) 3 Discount Spread (reflecting some risks associated with Canco s customers increased use of rebate entitlements and prompt payment discounts). The Yield Rate component was largely undisputed. However, the TCC applied floating terms to the Loss Discount and Discount Spread, rather than fixed terms set by Canco and Luxco in the RSA. Further, the TCC re-computed the discount rate adjustments used by Canco in the RSA (described below) to derive the Loss Discount and Discount Spread for the decision. The adjustments applied in the RSA by the taxpayer primarily increased the effective discount rate, and the TCC proposed substantially lower adjustments, as explained below. Reasons for TCC s discount rate The TCC stated that a key reason for recomputing the Loss Discount and Discount Spread was to apply floating terms that may benefit both Canco and Luxco. The original terms were fixed based on several risk assumptions made when the RSA was drafted. Certain discount rate adjustments were, according to the TCC, cushioned in favour of Luxco to account for these risks assumed in the RSA. The TCC reduced some discount rate adjustments, such as the prompt-payment discount, and eliminated other adjustments, such as the accrued rebate dilutions discount. The TCC reasoned that adequate evidence was not provided to substantiate the reasonableness of certain discount rate adjustments in the RSA. KPMG observations The TCC disagreed with Canco s argument that the CRA s determination of the discount rate was a re-characterization under the Income Tax Act. The TCC stated that its approach to determining an arm s-length discount rate was within the normal realm of transfer pricing adjustments. The TCC suggested that the quantum of an amount can be adjusted under the transfer pricing rules of the Income Tax Act based on the terms and conditions agreed to by arm's-length parties, and these adjustments can be made to conform to the arm's-length standard without giving rise to a re-characterization of the transaction itself. The transaction can be re-characterized when the bona fide primary purpose of the transaction was to obtain a tax benefit, and the transaction would not have been entered into between persons dealing at arm s length, under the transfer pricing rules of the Income Tax Act. Page 3 of 5

4 In recomputing the discount rate components, the TCC either disregarded or significantly reduced many of the discount rate adjustments that Canco was relying on. The components were recomputed based on facts provided in evidence, a requirement of court procedure. Since the RSA fixed many elements that could increase or decrease, the TCC found it appropriate to evaluate the reasonableness of the discount rate adjustments from both parties perspective, so long as arm s-length factoring arrangements are negotiated in a similar fashion. This case is a reminder that documentation of the arm s-length nature of the various terms and conditions of an intercompany transaction is critical to demonstrate compliance with transfer pricing rules. Treaty limitations do not apply to withholding tax assessments The TCC agreed with the CRA that the assessment of the Part XIII withholding obligation on Canco was not restricted by Article 9(3) of the Treaty. Article 9(3) of the Treaty provides a maximum five-year period for either country to make a transfer pricing adjustment to the taxable income of a related company residing in the other country under the circumstances described in article 9(1) of the Treaty. The TCC reasoned that Article 9 of the Treaty cannot apply to the CRA s assessment, noting that the CRA was enforcing a collection provision in Canada s domestic legislation on Canco, and not, per se, adjusting Luxco s income and taxing it accordingly through Canco. KPMG observation The TCC s decision on the withholding tax issue in this case is important for both Canadian taxpayers and non-residents engaged in cross-border controlled transactions. Many of Canada s income tax treaties include a limitation period similar to the Canada- Luxembourg Income Tax Treaty. However, this decision if upheld on appeal may indicate that Canada s tax treaties will not override Canada s domestic legislation for Part XIII withholding tax assessments that are issued as secondary adjustments, albeit only where the primary transfer pricing adjustment is made within the relevant treaty time limitation. Relevance of tax morality Also of interest are certain obiter comments the TCC made, presumably in light of the OECD s Base Erosion and Profit Shifting (BEPS) initiative and greater call for tax morality and transparency (for details, see KPMG s TaxNewsFlash-Canada , OECD Action Plan Could Signal a Shift in the Global Tax Landscape ). The TCC noted that the CRA did not directly or indirectly raise any fair share or fiscal morality arguments that are currently trendy in international tax circles and that the CRA wisely stuck strictly to the tax fundamentals: the relevant provisions of the legislation and the evidence relevant thereto. The TCC pointed out that questions of tax morality and fair share of taxes are within the realm of Parliament. Page 4 of 5

5 We can help Your KPMG adviser can help you assess the effect of the TCC s decision on your business, and point out ways to take advantage of any benefits arising from the decision or help mitigate its impact. For more details on this decision and its potential impact, contact your KPMG adviser. Download KPMG s Tax Hub Canada app KPMG s free Tax Hub Canada App for ipads and Blackberrys provides timely, convenient tax news and tax rates to help you respond to changes in tax rules and regulations. Download the app today. Information is current to January 17, The information contained in this TaxNewsFlash-Canada is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG s National Tax Centre at KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ( KPMG International ). KPMG member firms around the world have 152,000 professionals, in 156 countries. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such. KPMG's Canadian Web site is located at KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. Page 5 of 5

Are Your Tax-Free Inter-Corporate Dividends in Jeopardy?

Are Your Tax-Free Inter-Corporate Dividends in Jeopardy? Are Your Tax-Free Inter-Corporate Dividends in Jeopardy? May 27, 2015 No. 2015-23 Canadian corporations that receive dividends from other Canadian corporations may be adversely affected by a recently expanded

More information

New Tax Regime May Upset Your Estate Planning

New Tax Regime May Upset Your Estate Planning New Tax Regime May Upset Your Estate Planning November 3, 2014 No. 2014-49 If your estate plan includes creating a trust in your will or you are a trust beneficiary or an estate trustee, you may be affected

More information

McKesson Canada - Transfer Pricing Rules Applied to the Sale of Receivables. By Christopher Steeves and Corum Van Esch

McKesson Canada - Transfer Pricing Rules Applied to the Sale of Receivables. By Christopher Steeves and Corum Van Esch CCH International Tax Newsletter - vol. 74, February 2014 McKesson Canada - Transfer Pricing Rules Applied to the Sale of Receivables By Christopher Steeves and Corum Van Esch McKesson Canada - Transfer

More information

Making the Most of Your Charitable Gifts for 2015

Making the Most of Your Charitable Gifts for 2015 Making the Most of Your Charitable Gifts for 2015 January 30, 2015 No. 2015-07 Canada s tax incentives for charitable donations are designed to make it easier for you to support your favourite charities.

More information

Treatment of Hybrid Entities. 5th Taxation of Inbound Investment Course September 19 & 20, 2011 Kathleen S.M. Hanly and Kevin H.

Treatment of Hybrid Entities. 5th Taxation of Inbound Investment Course September 19 & 20, 2011 Kathleen S.M. Hanly and Kevin H. Treatment of Hybrid Entities 5th Taxation of Inbound Investment Course September 19 & 20, 2011 Kathleen S.M. Hanly and Kevin H. Yip Topics Concepts: Fiscally transparent entity Hybrid entity Art. IV:6

More information

Highlights of the 2015 Manitoba Budget

Highlights of the 2015 Manitoba Budget Highlights of the 2015 Manitoba Budget April 30, 2015 No. 2015-22 Today Manitoba Finance Minister Greg Dewar delivered the province s 2015 budget. The budget anticipates a deficit of $422 million for the

More information

In This Issue. Earnings and Single-Member LLCs: Where Do We Start?...2 Anti-Discrimination and the Canada-UK Tax Treaty...5.

In This Issue. Earnings and Single-Member LLCs: Where Do We Start?...2 Anti-Discrimination and the Canada-UK Tax Treaty...5. In This Issue Earnings and Single-Member LLCs: Where Do We Start?...2 Anti-Discrimination and the Canada-UK Tax Treaty...5 A report on cross-border developments in Canadian tax law / March 2011 2 Earnings

More information

Cross Border Tax Issues

Cross Border Tax Issues Cross Border Tax Issues By Reinhold G. Krahn December 2000 This is a general overview of the subject matter and should not be relied upon as legal advice or opinion. For specific legal advice on the information

More information

Canada Releases Revised Back-to-Back Loan Rules

Canada Releases Revised Back-to-Back Loan Rules Volume 76, Number 4 October 27, 2014 Canada Releases Revised Back-to-Back Loan Rules by Steve Suarez Reprinted from Tax Notes Int l, October 27, 2014, p. 357 Canada Releases Revised Back-to-Back Loan Rules

More information

2015 Federal Budget Highlights

2015 Federal Budget Highlights 2015 Federal Budget Highlights April 21, 2015 No. 2015-18 Finance Minister Joe Oliver delivered the government s 2015 pre-election federal budget today. The budget expects a deficit of $2.0 billion for

More information

Global Transfer Pricing Review

Global Transfer Pricing Review GLOBAL TRANSFER PRICING SERVICES Global Transfer Pricing Review Mexico kpmg.com TAX 2 Global Transfer Pricing Review Mexico KPMG observation Mexico has been very active in transfer pricing. The tax authority

More information

Structuring Entry into the Canadian Market: A Corporate Tax Primer

Structuring Entry into the Canadian Market: A Corporate Tax Primer Structuring Entry into the Canadian Market: A Corporate Tax Primer It is critical for non-residents to obtain proper Canadian legal advice respecting their long-term tax position before entering the Canadian

More information

Leveraged Life Insurance Personal Ownership

Leveraged Life Insurance Personal Ownership Leveraged Life Insurance Personal Ownership Introduction Leveraged life insurance is a financial planning strategy that uses the cash value of an exempt life insurance policy as collateral security for

More information

Post-Election 2015 Personal Tax Savings Act Fast

Post-Election 2015 Personal Tax Savings Act Fast Post-Election 2015 Personal Tax Savings Act Fast October 28, 2015 No. 2015-30 Now that Canada s federal election is over and the year is coming to an end, it s time to take stock and consider your 2015

More information

Taxation Of Non-Resident Trusts

Taxation Of Non-Resident Trusts How did we get here and where do we go from here? Paul R. LeBreux Globacor Tax Advisors/Moodys Gartner Tax Law LLP Taxation of Taxation Of Bottom Line - international tax structures involving nonresident

More information

CONTINUING ISSUES FOR U.S. LLCS INVESTING INTO CANADA

CONTINUING ISSUES FOR U.S. LLCS INVESTING INTO CANADA MARCH 2010 CONTINUING ISSUES FOR U.S. LLCS By Elinore Richardson and Stephanie Wong TAX LAW BULLETIN The Canada Revenue Agency ( CRA ), on February 11, 2010, issued a Technical Memorandum on the application

More information

Global Transfer Pricing Review

Global Transfer Pricing Review GLOBAL TRANSFER PRICING SERVICES Global Transfer Pricing Review Australia kpmg.com TAX 2 Global Transfer Pricing Review Australia KPMG observation The transfer pricing landscape in Australia continues

More information

TAX PLANNING INTERNATIONAL

TAX PLANNING INTERNATIONAL TAX PLANNING INTERNATIONAL EUROPEAN TAX SERVICE International Information for International Business >>>>>>>>>>>>>>>>>>>>>>>>>>>>> VOLUME 17, NUMBER 3 >>> MARCH 2015 www.bna.com EU Financial Transaction

More information

and Before: The Honourable Justice Patrick Boyle Ryder Gilliland Jeffrey Trossman Ilan Braude Kaley Pulfer JUDGMENT

and Before: The Honourable Justice Patrick Boyle Ryder Gilliland Jeffrey Trossman Ilan Braude Kaley Pulfer JUDGMENT Docket: 2008-2949(IT)G BETWEEN: MCKESSON CANADA CORPORATION, and Appellant, HER MAJESTY THE QUEEN, Respondent. Appeal heard on common evidence with the appeal of McKesson Canada Corporation 2008-3471(IT)G

More information

Related party transactions Section 34D has been enacted recently in the SITA to legislatively endorse the arm slength

Related party transactions Section 34D has been enacted recently in the SITA to legislatively endorse the arm slength 65. Singapore Introduction Although Singapore s income tax rates are traditionally lower than the income tax rates of the majority of Singapore s primary trading partners, the Inland Revenue Authority

More information

Weekly Tax Matters. 21 August 2015. kpmg.co.uk

Weekly Tax Matters. 21 August 2015. kpmg.co.uk Weekly Tax Matters 21 August 2015 kpmg.co.uk contents CORPORATE TAX HMRC hold an informal consultation on the scope of ATED reliefs INDIRECT TAX Redcats Brands First-tier Tribunal decision EMPLOYMENT TAX

More information

Important Considerations in the Pricing of Intercompany Loans and Financial Guarantees

Important Considerations in the Pricing of Intercompany Loans and Financial Guarantees Intercompany Transfer Price Insights Important Considerations in the Pricing of Intercompany Loans and Financial Guarantees Matt C. Courtnage Over the past several years, taxing authorities have devoted

More information

TAX 101 INTRODUCTORY LESSONS: FINANCING A U.S. SU BSIDIARY DEBT VS. EQUITY INTRODUCTION. Authors Galia Antebi and Nina Krauthamer

TAX 101 INTRODUCTORY LESSONS: FINANCING A U.S. SU BSIDIARY DEBT VS. EQUITY INTRODUCTION. Authors Galia Antebi and Nina Krauthamer TAX 101 INTRODUCTORY LESSONS: FINANCING A U.S. SU BSIDIARY DEBT VS. EQUITY Authors Galia Antebi and Nina Krauthamer Tags Debt Equity INTRODUCTION When a foreign business contemplates operating in the U.S.

More information

2010 TAX LAW FOR LAWYERS

2010 TAX LAW FOR LAWYERS 2010 TAX LAW FOR LAWYERS National Tax Law CLE Program INBOUND INVESTMENT CROSS BORDER ISSUES Working with Tax Treaties by Maralynne A. Monteith WeirFoulds LLP June 1, 2010 WHAT IS A TAX TREATY A tax treaty

More information

The Foreign Affiliate System. Robert Raizenne June 3, 2010

The Foreign Affiliate System. Robert Raizenne June 3, 2010 The Foreign Affiliate System Robert Raizenne June 3, 2010 The Legislative Scheme Subdivision (i) of Division B of Part I Section 90 Dividend received inclusion Sections 91 and 92 FAPI rules Section 93

More information

Factoring of Receivables

Factoring of Receivables LMSB-04-0606-004 Internal Revenue Service Factoring of Receivables Audit Technique Guide (ATG) NOTE: This guide is current through the publication date. Since changes may have occurred after the publication

More information

Strategies for Resolving Cross-Border Tax Controversies

Strategies for Resolving Cross-Border Tax Controversies Strategies for Resolving Cross-Border Tax Controversies 11th Annual Conference on Canada-US Cross-Border Tax Strategies Council for International Tax Education (CITE) Toronto, ON October 17-18, 2005 Alan

More information

C h a l l e n g e U s

C h a l l e n g e U s C h a l l e n g e U s LANDMARK INTERNATIONAL TAX RULINGS AN INDIAN PERSPECTIVE International Tax Conference PHD Chamber September 5, 2014 Parul Jain, Partner YANKO WEISS ISRAELI TEL- AVIV COURT YANKO WEISS

More information

and Luis Gomez Almeida Christopher Kitchen JUDGMENT "Paul Bedard" Bedard J.

and Luis Gomez Almeida Christopher Kitchen JUDGMENT Paul Bedard Bedard J. BETWEEN: GOMEZ CONSULTING LTD., and HER MAJESTY THE QUEEN, Do c ket: 2012-1000(IT)I Appellant, Respondent. Appearances Appeal heard on Apri18, 2013, at Ottawa, Canada Before: The Honourable Justice Paul

More information

Investment into Canada

Investment into Canada Asia Pacific International Core of Excellence Investment into Canada Chris Roberge Deloitte AP ICE - Canada Vanessa Poon Deloitte AP ICE Canada June 6, 2012 Agenda Canadian tax regime overview Introduction

More information

U.S. Inbound Tax Services

U.S. Inbound Tax Services TAX U.S. Inbound Tax Helping foreign companies achieve tax-efficiency in their U.S. operations kpmg.com 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network

More information

Recent developments regarding Mexico s tax treaty network and relevant court precedents

Recent developments regarding Mexico s tax treaty network and relevant court precedents Recent developments regarding Mexico s tax treaty network and relevant court precedents Mexico has a relatively short background on the negotiation and application of treaties for the avoidance of double

More information

ULC Problems and Solutions. Miller Thomson Seminar: Tax Update October 22, 2009

ULC Problems and Solutions. Miller Thomson Seminar: Tax Update October 22, 2009 MILLER THOMSON LLP Barristers & Solicitors Patent & Trade-Mark Agents Robson Court 1000-840 Howe Street Vancouver, BC Canada V6Z 2M1 Tel. 604.687.2242 Fax. 604.643.1200 www.millerthomson.com VANCOUVER

More information

Mexico. Key messages Extended business travelers are likely to be taxed on employment income relating to their Mexican workdays.

Mexico. Key messages Extended business travelers are likely to be taxed on employment income relating to their Mexican workdays. Mexico Introduction A person s liability for Mexican tax is determined by residence status for taxation purposes and the source of income derived by the individual. Contact Nora Solano KPMG in Mexico Director

More information

Spin-Off of Time Warner Cable Inc. Tax Information Statement As of March 19, 2009

Spin-Off of Time Warner Cable Inc. Tax Information Statement As of March 19, 2009 Spin-Off of Time Warner Cable Inc. Tax Information Statement As of March 19, 2009 On March 12, 2009, Time Warner Inc. ( Time Warner ) completed the spin-off (the Spin-Off ) of Time Warner s ownership interest

More information

How Canada Taxes Foreign Income

How Canada Taxes Foreign Income - 1 - How Canada Taxes Foreign Income (Summary) Purpose of the book The purpose of writing this book, entitled How Canada Taxes Foreign Income is particularly for the benefit of foreign tax lawyers, accountants,

More information

tax update january 2013

tax update january 2013 tax update january 2013 Summary Luxembourg news 3 New tax measures for 2013 3 New Circular Letter on stock option plans 4 Circular Letter on loss carry-forward in the case of business succession 5 Use

More information

Doing It Right the First Time! Avoiding the Most Common Tax Return Errors by Jamie Golombek

Doing It Right the First Time! Avoiding the Most Common Tax Return Errors by Jamie Golombek March 19, 2014 Doing It Right the First Time! Avoiding the Most Common Tax Return Errors by Jamie Golombek Preparing your tax return can be a daunting task. While nearly 70% 1 of individuals engage tax

More information

Taxation of Cross-Border Mergers and Acquisitions

Taxation of Cross-Border Mergers and Acquisitions KPMG INTERNATIONAL Taxation of Cross-Border Mergers and Acquisitions Panama kpmg.com 2 Panama: Taxation of Cross-Border Mergers and Acquisitions Panama Introduction The signing of several Free Trade Agreements

More information

PURCHASE AND SALE OF A BUSINESS - SHARE TRANSACTIONS

PURCHASE AND SALE OF A BUSINESS - SHARE TRANSACTIONS TAX LAW FOR LAWYERS PURCHASE AND SALE OF A BUSINESS - SHARE TRANSACTIONS INCLUDING TAX ISSUES IN DOCUMENTATION Douglas A. Cannon Mario Abrioux McCarthy Tétrault LLP May 2010 TABLE OF CONTENTS PART ONE:

More information

ALBERTA CORPORATE TAX ACT

ALBERTA CORPORATE TAX ACT Province of Alberta ALBERTA CORPORATE TAX ACT Revised Statutes of Alberta 2000 Current as of December 11, 2015 Office Consolidation Published by Alberta Queen s Printer Alberta Queen s Printer 7 th Floor,

More information

Brazilian interest payments on net equity (Juros sobre o capital próprio): an international perspective

Brazilian interest payments on net equity (Juros sobre o capital próprio): an international perspective Brazilian interest payments on net equity (Juros sobre o capital próprio): an international perspective 1. Interest on Equity and Dividends: the Brazilian perspective Brazilian companies have two main

More information

Pending and Proposed Alberta Tax Rates

Pending and Proposed Alberta Tax Rates Pending and Proposed Alberta Tax Rates Dennis J. Auger October 27, 2015 Alberta CCPC Integrated Tax Rates, 2014-2019 Inclusive Assumes Calendar Year and Small Business Deduction 1 Alberta CCPC Integrated

More information

TAX LAW / INVESTMENT FUNDS BULLETIN CANADA EXTENDS SOURCE TAXATION FOR INVESTMENT FUNDS

TAX LAW / INVESTMENT FUNDS BULLETIN CANADA EXTENDS SOURCE TAXATION FOR INVESTMENT FUNDS February 9, 2005 CANADA EXTENDS SOURCE TAXATION TAX LAW / INVESTMENT FUNDS BULLETIN The Department of Finance released on December 6, 2004, draft legislation (the Amendments ) implementing the March 23,

More information

Global Transfer Pricing Review

Global Transfer Pricing Review GLOBAL TRANSFER PRICING SERVICES Global Transfer Pricing Review Czech PolandRepublic kpmg.com/gtps TAX 2 Global Transfer Pricing Review Poland KPMG observation On 18 July 2013, amendments to Decrees of

More information

Provinces and territories also impose income taxes on individuals in addition to federal taxes

Provinces and territories also impose income taxes on individuals in addition to federal taxes Worldwide personal tax guide 2013 2014 Canada Local information Tax Authority Website Tax Year Tax Return due date Is joint filing possible Are tax return extensions possible Canada Revenue Agency (CRA)

More information

Taiwan e-tax Alert. Issue 37 April 7, 2014

Taiwan e-tax Alert. Issue 37 April 7, 2014 Taiwan e-tax Alert Issue 37 April 7, 2014 Views on possible applications of cross-strait taxation agreement from experience of tax treaties between Taiwan and other countries As the cross-strait taxation

More information

CANADA U.S. TREATY COULD

CANADA U.S. TREATY COULD JANUARY 2010 CANADA U.S. TREATY COULD IMPACT LATIN AMERICAN By Elinore J. Richardson and Stephanie Wong TAX LAW BULLETIN www.blgcanada.com Any structuring of investments by a Latin American investor into

More information

Submission to the Department of Finance on The Taxation of Corporate Groups

Submission to the Department of Finance on The Taxation of Corporate Groups Submission to the Department of Finance on The Taxation of Corporate Groups Prepared by the Canadian Bankers Association April 11, 2011 EXPERTISE CANADA BANKS ON LA RÉFÉRENCE BANCAIRE AU CANADA Introduction

More information

Thinking Beyond Borders

Thinking Beyond Borders INTERNATIONAL EXECUTIVE SERVICES Thinking Beyond Borders Uganda kpmg.com Uganda Introduction An individual s liability to income tax in Uganda is determined according to the nature of income earned and

More information

Greece Country Profile

Greece Country Profile Greece Country Profile EU Tax Centre March 2013 Key factors for efficient cross-border tax planning involving Greece EU Member State Double Tax Treaties With: Albania Estonia Lithuania Serbia Armenia Finland

More information

Australia Tax Alert. Budget 2013-14 targets debt funding by multinationals. Thin capitalization rules. International Tax. 15 May 2013.

Australia Tax Alert. Budget 2013-14 targets debt funding by multinationals. Thin capitalization rules. International Tax. 15 May 2013. International Tax Australia Tax Alert Contacts Peter Madden pmadden@deloitte.com.au Claudio Cimetta ccimetta@deloitte.com.au Vik Khanna vkhanna@deloitte.com.au Alyson Rodi arodi@deloitte.com.au David Watkins

More information

Explanatory Notes Relating to the Income Tax Act, the Excise Tax Act and the Income Tax Regulations

Explanatory Notes Relating to the Income Tax Act, the Excise Tax Act and the Income Tax Regulations Explanatory Notes Relating to the Income Tax Act, the Excise Tax Act and the Income Tax Regulations Published by The Honourable James M. Flaherty, P.C., M.P. Minister of Finance September 2013 Preface

More information

Luxembourg..Tax Regime. for Intellectual Property Income

Luxembourg..Tax Regime. for Intellectual Property Income Luxembourg.Tax Regime for Intellectual Property Income December 2009 Table of contents 1. Introduction... 2 2. Qualifying IP rights... 3 3. Tax benefits under the IP regime... 3 4. Conditions to benefit

More information

TAX NEWSLETTER. February 2012

TAX NEWSLETTER. February 2012 TAX NEWSLETTER February 2012 RECORDING YOUR BUSINESS AUTOMOBILE EXPENSES PRESCRIBED AUTOMOBILE AMOUNTS FOR 2012 EMPLOYEE LOANS CRA SIMPLIFIED RATES FOR MOVING EXPENSES INCURRED IN 2011 CRA PUTS END TO

More information

management fee documentation

management fee documentation Issue 2010-02 www.bdo.ca the tax factor e-communications from the cra READ MORE p4 management fee documentation READ MORE p6 relief on US FBAR requirements READ MORE p8 Changes to the Tax Deferral on Publicly

More information

Debt Guarantee Fees and the Arm s-length Standard

Debt Guarantee Fees and the Arm s-length Standard Volume 65, Number 7 February 13, 2012 Debt Guarantee Fees and the Arm s-length Standard by Thomas Horst Reprinted from Tax Notes Int l, February 13, 2012, p. 537 Debt Guarantee Fees and the Arm s-length

More information

Fifth Protocol to the Canada-U.S. Income Tax Treaty Reflections

Fifth Protocol to the Canada-U.S. Income Tax Treaty Reflections Fifth Protocol to the Canada-U.S. Income Tax Treaty Reflections The fifth Protocol to the Canada-U.S. Income Tax Convention (Treaty) was signed on September 21, 2007. This Tax Memo reflects on the effect

More information

New United Kingdom Tax on Cross-Border Tax Planning: Diverted Profits Tax

New United Kingdom Tax on Cross-Border Tax Planning: Diverted Profits Tax UK CLIENT MEMORANDUM ENGLISH LAW UPDATES New United Kingdom Tax on Cross-Border Tax Planning: Diverted Profits Tax 5 February 2015 AUTHOR Judith Harger Introduction Following heated press coverage and

More information

Tax for the Non-Tax Lawyer

Tax for the Non-Tax Lawyer Tax for the Non-Tax Lawyer Tuesday, September 9, 2014 Presented By: Thomas May, Partner, Baker & McKenzie LLP Alan Zoccolillo, Partner, Baker & McKenzie LLP 1 Agenda 2 Topics to be covered: Overview of

More information

70. Switzerland. Other regulations

70. Switzerland. Other regulations 70. Switzerland Introduction Switzerland does not have specific transfer pricing regulations but respectively adheres to the Organisation for Economic Co-operation and Development (OECD) Guidelines. As

More information

An Overview of Indonesia s Insurance Sector Tax Environment

An Overview of Indonesia s Insurance Sector Tax Environment KPMG HADIBROTO An Overview of Indonesia s Insurance Sector Tax Environment kpmg.com/id 1 An Overview of Indonesia s Insurance Sector Tax Environment The Indonesian insurance industry has seen continued

More information

CANADA INTERPRETS ANTI-HYBRID RULES IN TREATY WITH THE U.S.

CANADA INTERPRETS ANTI-HYBRID RULES IN TREATY WITH THE U.S. JANUARY 2010 CANADA INTERPRETS ANTI-HYBRID RULES IN By Elinore Richardson and Stephanie Wong TAX LAW BULLETIN www.blgcanada.com The Canada Revenue Agency ( CRA ) recently provided its views on the application

More information

TAX NEWSLETTER. September 2013

TAX NEWSLETTER. September 2013 TAX NEWSLETTER September 2013 IMMIGRATING TO CANADA GIANT TECHNICAL BILL PASSED HUNDREDS OF TAX CHANGES WHAT IF YOU DISAGREE WITH THE CRA? AROUND THE COURTS IMMIGRATING TO CANADA Have you or a family member

More information

FEDERAL TAXATION OF INTERNATIONAL TRANSACTIONS

FEDERAL TAXATION OF INTERNATIONAL TRANSACTIONS Chapter 10 FEDERAL TAXATION OF INTERNATIONAL TRANSACTIONS Daniel Cassidy 1 10.1 INTRODUCTION Foreign companies with U.S. business transactions face various layers of taxation. These include income, sales,

More information

TAX LAWS AMENDMENT (TAX INTEGRITY MULTINATIONAL ANTI-AVOIDANCE LAW) BILL 2015 EXPOSURE DRAFT EXPLANATORY MATERIAL

TAX LAWS AMENDMENT (TAX INTEGRITY MULTINATIONAL ANTI-AVOIDANCE LAW) BILL 2015 EXPOSURE DRAFT EXPLANATORY MATERIAL TAX LAWS AMENDMENT (TAX INTEGRITY MULTINATIONAL ANTI-AVOIDANCE LAW) BILL 2015 EXPOSURE DRAFT EXPLANATORY MATERIAL Table of contents Glossary... 1 Tax integrity multinational anti-avoidance law... 3 Glossary

More information

Tax insights Deconstructing the Chevron Transfer Pricing Case

Tax insights Deconstructing the Chevron Transfer Pricing Case 3 November 2015 2015/33 Australia Tax insights Deconstructing the Chevron Transfer Pricing Case Snapshot The Federal Court issued its much anticipated decision in Chevron Australia Holdings Pty Ltd v Commissioner

More information

Global Transfer Pricing Conference

Global Transfer Pricing Conference www.pwc.com/tp Managing multiple stakeholders in the new economy Global Transfer Pricing Conference Financial transactions in a changing world Today s presenters Jeff Rogers Arthur Mendoza Krishnan Chrandrasekhar

More information

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST Court File No. 06-CL-6482 ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST IN THE MATTER OF THE COMPANIES CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PROPOSED PLAN

More information

Dealing with Stock Options in Corporate Acquisitions Navigating the Labyrinth

Dealing with Stock Options in Corporate Acquisitions Navigating the Labyrinth Dealing with Stock Options in Corporate Acquisitions Navigating the Labyrinth Precis In a transaction involving the purchase and sale of shares of a corporation, there may be outstanding employee stock

More information

Court Addresses (Again!) Employee Stock Option Expenses for Transfer Pricing Purposes

Court Addresses (Again!) Employee Stock Option Expenses for Transfer Pricing Purposes Court Addresses (Again!) Employee Stock Option Expenses for Transfer Pricing Purposes Ninth Circuit Reverses Itself and Holds that the Arm s-length Standard Controls in Determining if Employee Stock Option

More information

Contents. Application. Summary

Contents. Application. Summary NO.: IT-99R5 (Consolidated) DATE: See Bulletin Revisions section SUBJECT: REFERENCE: INCOME TAX ACT Legal and Accounting Fees Paragraph 18(1)(a) (also sections 9 and 239; subsections 13(12), 20(9), and

More information

International Taxation: Executive Brief

International Taxation: Executive Brief This executive brief provides an overview of the principal international taxation rules contained in the Income Tax Act (Canada) (Act). 1 These rules typically deal with the taxation of persons that have

More information

Canada. Contact James Yager KPMG in Canada Tax Partner T: +1 416 777 8214 E: jyager@kpmg.ca

Canada. Contact James Yager KPMG in Canada Tax Partner T: +1 416 777 8214 E: jyager@kpmg.ca Canada Introduction Liability to Canadian tax is determined by residence status for taxation purposes and the source of income derived by an individual. Income tax is levied at progressive rates on a person

More information

Preparation Is Key When A Non-U.S. Tax Resident Joins The Board Of Directors

Preparation Is Key When A Non-U.S. Tax Resident Joins The Board Of Directors Compensation & Fringe Benefits Preparation Is Key When A Non-U.S. Tax Resident Joins The Board Of Directors Preparation is Key When a Non-U.S. Tax Resident Joins the Board of Directors, Corporate Taxation

More information

Debt Restructuring. 17th Taxation of Corporate Reorganization Conference January 22, 23 & 24, 2013 Kathleen S.M. Hanly and Kevin H.

Debt Restructuring. 17th Taxation of Corporate Reorganization Conference January 22, 23 & 24, 2013 Kathleen S.M. Hanly and Kevin H. Debt Restructuring 17th Taxation of Corporate Reorganization Conference January 22, 23 & 24, 2013 Kathleen S.M. Hanly and Kevin H. Yip Debt Restructuring Legislative framework for insolvency proceedings

More information

Thinking Beyond Borders

Thinking Beyond Borders INTERNATIONAL EXECUTIVE SERVICES Thinking Beyond Borders Hong Kong kpmg.com Hong Kong Introduction There is no general income tax in Hong Kong. For income to be subject to tax, it must fall under one of

More information

May 20, 2009 Client Alert

May 20, 2009 Client Alert Client Alert Bei j i n g Fr a n k f u r t Ho n g Ko n g Lo n d o n Lo s An g e l e s Mu n i c h Ne w Yo r k Si n g a p o r e To k y o Wa s h i n g t o n, DC International Tax Regime Targeted in Latest

More information

Canadian Corporate Tax Guide

Canadian Corporate Tax Guide Canadian Corporate Tax Guide P850 Goodmans Tax Guide Cover:P850 Goodmans Tax Guide Cover 10-01-14 5:21 PM Page 2 Canadian Corporate Tax Guide About This Guide If you are considering doing business in Canada,

More information

Global Tax and Legal September 2014. OECD s BEPS initiative a global survey Multinational survey results

Global Tax and Legal September 2014. OECD s BEPS initiative a global survey Multinational survey results Global Tax and Legal September 2014 OECD s BEPS initiative a global survey Multinational survey results OECD s BEPS initiative Multinational survey results The purpose of Deloitte s recent survey, OECD

More information

TAX ALERT TAX AND EXCHANGE CONTROL CONSIDERATIONS ON THE TRANSFER OF SHARES IN SOUTH AFRICAN COMPANIES BETWEEN NON-RESIDENTS IN THIS ISSUE

TAX ALERT TAX AND EXCHANGE CONTROL CONSIDERATIONS ON THE TRANSFER OF SHARES IN SOUTH AFRICAN COMPANIES BETWEEN NON-RESIDENTS IN THIS ISSUE 21 JANUARY 2011 TAX ALERT TAX AND EXCHANGE CONTROL CONSIDERATIONS ON THE TRANSFER OF SHARES IN SOUTH AFRICAN COMPANIES BETWEEN NON-RESIDENTS It is quite common for multinational organisations to embark

More information

Canada-U.S. Cross-Border Structures and the Anti-Hybrid Rules

Canada-U.S. Cross-Border Structures and the Anti-Hybrid Rules O~~TARIO. ~ BAR ASSOCIl~TION 4 3.rnch c! tl:,. Conadian Ba~A sa..iai::::; Ken Snider Canada-U.S. Cross-Border Structures and the Anti-Hybrid Rules Taxation Law Spring Cleaning: A Potpourri of Leading Tax

More information

International Tax Alert

International Tax Alert Global Insights A Review of Key Regulatory Issues Impacting International Tax Practices European Union: German dividend withholding tax violates the principle of free movement of capital (ECJ, October

More information

Non-Resident Investment in Canadian Real Estate. Jack Bernstein and Barbara Worndl

Non-Resident Investment in Canadian Real Estate. Jack Bernstein and Barbara Worndl Non-Resident Investment in Canadian Real Estate Jack Bernstein and Barbara Worndl Nonresident Investment in Canadian Real Estate by Jack Bernstein and Barbara Worndl Jack Bernstein and Barbara Worndl are

More information

BEPS ACTION 7: PREVENTING THE ARTIFICIAL AVOIDANCE OF PE STATUS

BEPS ACTION 7: PREVENTING THE ARTIFICIAL AVOIDANCE OF PE STATUS Public Discussion Draft BEPS ACTION 7: PREVENTING THE ARTIFICIAL AVOIDANCE OF PE STATUS 31 October 2014 9 January 2015 TABLE OF CONTENTS Introduction...9 A. Artificial avoidance of PE status through commissionnaire

More information

USA Taxation. 3.1 Taxation of funds. Taxation of regulated investment companies: income tax

USA Taxation. 3.1 Taxation of funds. Taxation of regulated investment companies: income tax USA Taxation FUNDS AND FUND MANAGEMENT 2010 3.1 Taxation of funds Taxation of regulated investment companies: income tax Investment companies in the United States (US) are structured either as openend

More information

STATE OF ARIZONA Department of Revenue Office of the Director (602) 716-6090

STATE OF ARIZONA Department of Revenue Office of the Director (602) 716-6090 STATE OF ARIZONA Department of Revenue Office of the Director (602) 716-6090 Janet Napolitano Governor CERTIFIED MAIL [redacted] Gale Garriott Director The Director's Review of the Decision ) O R D E R

More information

Macau SAR Tax Profile

Macau SAR Tax Profile Macau SAR Tax Profile Produced in conjunction with the KPMG Asia Pacific Tax Centre Updated: June 2015 Contents 1 Corporate Income Tax 1 2 Income Tax Treaties for the Avoidance of Double Taxation 5 3 Indirect

More information

The Danish parliament has passed two bills that

The Danish parliament has passed two bills that Out of Denmark Dividend Withholding Taxation Expanded by Jens Wittendorff Jens Wittendorff is an international tax partner with Deloitte Copenhagen and an honorary professor with the Department of Business

More information

Comparing REITs. kpmg.ca

Comparing REITs. kpmg.ca Comparing REITs US vs. Canada January 2013 kpmg.ca Table of Contents REITs US & Canada Tax at Shareholders Level el US & Canada Corporate domestic shareholders Individual domestic shareholders Foreign

More information

SUPREME COURT OF CANADA. CITATION: Fundy Settlement v. Canada, 2012 SCC 14 DATE: 20120412 DOCKET: 34056, 34057

SUPREME COURT OF CANADA. CITATION: Fundy Settlement v. Canada, 2012 SCC 14 DATE: 20120412 DOCKET: 34056, 34057 SUPREME COURT OF CANADA CITATION: Fundy Settlement v. Canada, 2012 SCC 14 DATE: 20120412 DOCKET: 34056, 34057 BETWEEN: St. Michael Trust Corp., as Trustee of the Fundy Settlement Appellant and Her Majesty

More information

The Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan

The Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan The Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan Offering Circular Effective November 6, 2013 The description contained in this Offering Circular of the Canadian and U.S. income tax

More information

Income tax rates for Canadian-controlled private corporations (CCPCs) 2012-2013

Income tax rates for Canadian-controlled private corporations (CCPCs) 2012-2013 Income tax rates for Canadian-controlled private corporations (CCPCs) 2012-2013 Federal income tax rates for income earned by a CCPC 1 Small Active Income between $400,000 and General Active General corporate

More information

IE Singapore iadvisory Seminar Doing Business in Japan: General Overview of Taxation in Japan

IE Singapore iadvisory Seminar Doing Business in Japan: General Overview of Taxation in Japan IE Singapore iadvisory Seminar Doing Business in Japan: General Overview of Taxation in Japan KPMG Tax Corporation March 12, 2013 Overview of Japanese tax (1/4) In general, a high tax jurisdiction Primary

More information

News Flash Hong Kong Tax. November 2015 Issue 10. In brief. In detail. www.pwchk.com

News Flash Hong Kong Tax. November 2015 Issue 10. In brief. In detail. www.pwchk.com News Flash Hong Kong Tax Understanding the IRD s views on emerging corporate tax issues, in particular the practice on processing Hong Kong tax resident certificate applications November 2015 Issue 10

More information

I. CANADIAN INBOUND INVESTMENTS - GENERAL CONSIDERATIONS

I. CANADIAN INBOUND INVESTMENTS - GENERAL CONSIDERATIONS CANADIAN PETROLEUM TAX JOURNAL Vol. 27, 2014-3 HOLDING STRUCTURES FOR CANADIAN INBOUND AND OUTBOUND INVESTMENTS - THE UK OPTION Prepared for: Canadian Petroleum Tax Society 2014 Annual Conference by Dion

More information

Cambodia Tax Profile. kpmg.com.kh

Cambodia Tax Profile. kpmg.com.kh Cambodia Tax Profile kpmg.com.kh Content 1 2 Tax Profile Income Tax Treaties for the Avoidance of Double Taxation 6 Indirect Tax (e.g. VAT/GST) 7 8 Personal Taxation Other Taxes 9 11 Free Trade Agreements

More information

Conflicts and Issues under The U.S. - India Tax Treaty

Conflicts and Issues under The U.S. - India Tax Treaty TAX TREATIES Conflicts and Issues under The U.S. - India Tax Treaty Shefali Goradia*, Carol P. Tello** When the income tax treaty between India and the United States ( Treaty ) was negotiated in the late

More information