Search

Various common US financing structures have been affected by US tax reform, as well as by changes in the EU taxation regime, which were influenced by certain countries implementing anti-hybrid rules that arose from the base erosion and profit shifting (BEPS) initiative of the Organisation for Economic Co-operation and Development (OECD). In particular, section 267A, enacted in 2017 as part of the Tax Cuts and Jobs Act, disallows a deduction for interest or royalties paid or accrued in certain transactions involving hybrid arrangements. According to the legislative history, Congress intended section 267A to be consistent with many of the approaches taken in the Code to these problems, the BEPS project, bilateral income tax treaties, and the laws of other countries. The hybrid arrangements of concern are those that exploit differences in the taxation of transactions or entities under the laws of various jurisdictions to achieve double non-taxation, including long-term deferral. The rules of section 267A are generally effective for taxable years beginning after December 31, 2017. The authors summarize the key provisions of section 267A and explore their impact on common US financing structures. In addition, they provide an overview of cross-border financing structures for US operations and related tax considerations. [ABSTRACT FROM AUTHOR]

The panellists discuss the ratification of the multilateral instrument in Canada and how Canadian companies may be affected. Specifically, the panellists discuss the implementation of the principal-purpose test, including several examples of how these provisions will apply. They identify areas of uncertainty and where additional guidance from the Canada Revenue Agency would be helpful. [ABSTRACT FROM AUTHOR]

The author explores the various uses of the concept of "purpose" in the Income Tax Act and categorizes the various types and degrees of "purpose," with a view to identifying any relevant distinctions between these categories and between purposes and other considerations, and he discusses more practical concerns, such as how to prove or establish that a particular purpose is present or absent in particular circumstances. The author also examines the use of "purpose" as a factor affecting the scope and function of particular provisions in the Income Tax Act. [ABSTRACT FROM AUTHOR]

In 2016, the Organisation for Economic Co-operation and Development (OECD) released the text and explanatory notes of the Multilateral Convention To Implement Tax Treaty Related Measures To Prevent Base Erosion and Profit Shifting (BEPS), under beps action 15 (the MLI). The mli is to be applied alongside existing tax treaties, modifying their application in order to implement certain beps measures, without the need for separate bilateral treaty negotiations. The MLI constitutes a significant change in international taxation and will have an important impact on the taxation of multinational companies. Since June 7, 2017, Canada and over 75 other jurisdictions have signed the MLI and released their preliminary positions and reservations. The panellists review the key provisions of the MLI and examine when and how the MLI may apply to modify certain aspects of Canadian tax treaties, given both Canada’s announced MLI positions and the potential changes to those positions, and given the choices made by some of Canada’s most important treaty partners. The panellists also discuss beps action 6 (preventing treaty abuse), as well as other beps topics that may be affected by the MLI (action 2, on hybrid mismatch arrangements; action 7, on the artificial avoidance of permanent establishment [pe] status; and action 14, on dispute resolution). [ABSTRACT FROM AUTHOR]

The Canadian government first proposed actions in respect of so-called treaty shopping in its budget of March 2013; those proposals were followed by more detailed proposals in its budget of February 2014. At the same time, the OECD and the G20, in the context of the BEPS actions, have included treaty shopping as Action 6. The panel discusses the potential impact of the Canadian domestic proposals on the tax aspects of the structuring of inbound investments into Canada as well as the interaction of the Canadian proposals with the Action 6 discussion drafts. [ABSTRACT FROM AUTHOR]

Canada has recently entered into a number of new tax treaties and has amended some of its existing treaties. The authors discuss several of these treaties, focusing on Canada's new tax treaty with Hong Kong and its amended tax treaties with the United Kingdom and Barbados. Although these new and amended treaties share many similarities with Canada's other tax treaties and with the OECD model convention, their differences may indicate certain trends and themes, such as a pursuit by Canada of more robust exchange-of-information articles. [ABSTRACT FROM AUTHOR]

In this article, the author focuses on the transfer pricing with respect to the Canada-US tax treaty. He discusses the qualification and disqualification of the cases for arbitration and its impact on the authority cases. Information on rules regarding the arbitration procedure and the cases for potential arbitration with respect to the Canadian government and the U.S. government is also presented.

In this article the author focuses on the limited liability companies and the unlimited liability companies with the emphasis to the anti-hybrid rule of the Canada-US treaty. He states that the purpose of the rules introduced in the fifth protocol of the Canada-US treaty is to deny the tax benefits of the profits and loses and the income of the hybrid entities. Information on the dividends and the interests regarding the rules and the entities are also presented.

The article presents information on the tax treatment of the limited liability companies of the U.S. by Canada. It discusses the fifth protocol that was introduced to the Canada-US tax treaty and also its effect on the private companies that earned Canadian source of income. Information on the jurisprudence pertaining to the U.S. limited liability companies and its fundamental nature is also presented.

The article presents transcripts of a panel discussion held on November 29, 2010 on tax treaties by several tax professionals and tax authorities. It states that the main focus of the discussion is on treaty interpretation with emphasis on few cases and court rulings in Australia, Canada and Great Britain. Information on tax litigation, ownership and the effectiveness of the treaties is also presented.

The article focuses on the offshore trust and estate-planning issues arising from the legislative and jurisprudential developments in Canada with respect to international tax treaties. It examines the concept of trust residence for the purposes of the bilateral income tax convention of Canada. Furthermore, it mentions planning arrangements containing non-resident trusts that can obtain good personal and fiscal outcomes for taxpayers.

The article discusses the two important provisions introduced in the fifth protocol to the tax treaty of Canada-U.S. It explores the approaches such as direct conduit and a stepping-stone structure which can be used by Canada in its tax treaty network if the anti-avoidance rules and principles are inadequate. It tackles the interpretative, technical, and policy issues which are associated with the articles IV(6) and (7).

The article presents the transcript of panel presentation regarding the treaty policy in the U.S. on November 24, 2009. Larry Chapman mentions that understanding the process of treaty negotiation will be helpful for users of tax treaties. Patricia Brown says the views of the country on trade and investment are reflected in the tax treaty policy. David Rosenbloom adds that considering how the treaty will going to work in practice is one of the important things in negotiations.

The article discusses the application of the services permanent establishment (PE) provision which was added by the fifth protocol to the Canada-U.S. income tax treaty, effective as of January 10, 2010. It says that the provision establishes two tests which are single-individual and enterprise tests. It mentions several steps to prepare businesses for the new rules including review of staff on projects, creation of systems to track employees, and development of taxpayer compliance policies.

The article discusses the impact of new developments to financing of U.S. subsidiaries of Canadian companies. It mentions various ways to implement tax treatment of stocklending/sale and repurchase (repo) transactions. It also talks on the emergence of the financing provisions of the fifth protocol to the Canada-U.S. tax treaty on January 1, 2010 and the U.S.-Hungary negotiation of a new income tax treaty which have negative effects on certain common financing structures.

The article focuses on the evolution and application of general anti-avoidance rule (GAAR). It says that GAAR has been enacted in 1988 and has been amended in 2004 to clarify its application in regulations' misuse or abuse, tax treaties, and income tax application rules (ITARs). It presents a table which lists several Supreme Court and Federal Court Cases concerning GAAR issues including interest deductibility, terminal loss, and withholding tax on interest.