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US-Canada Cross Border Corporate Tax Challenges

On October 6, 2010, Duane Milot was a panelist during a Strafford Publications Inc. webinar entitled, "US-Canada Cross Border Corporate Tax Challenges."

This CLE webinar provided tax professionals with a review, by an experienced panel of Canadian tax advisors, of recent and emerging corporate tax developments for US companies. The panel outlined areas where compliance and planning must be adjusted.

Description

As US companies continue phasing in important compliance and tax planning changes required by the US-Canada Income Tax Convention (Treaty)'s Fifth Protocol, recent developments involving Canadian tax policy toward American businesses also command attention.

High-visibility actions include new Canada Revenue Agency policy statements on business entities and evolving written positions on hybrid structures, interpretive guidance on limitation on benefits regulations, and liberalized regulations on taxing income from US-held shares in Canadian companies.

There are also important Canadian court rulings on transfer pricing, pending revisions on regulations for controlled foreign corporations and foreign trusts, and transfer pricing guidelines for multinationals. Tax professionals for U.S. firms doing business in Canada need to stay up to date.

The panel of experienced tax advisors offered analysis of and insights into the most recent, relevant developments in corporate tax in Canada that affect US companies.

Outline

1. Recent developments in Canadian tax policy and regs
   1. CRA policy statements on entities and entity formation
   2. Written position and changes in stance toward hybrid entities
      1. Important remaining questions for taxpayers about post-protocol years
   3. Interpretive guidance on limitation on benefits regs
   4. Reg changes on U.S. taxpayer sales of shares in Canadian companies
   5. Proposed reg revisions for CFCs and foreign trusts
2. Transfer pricing issues for U.S. companies
   1.    Recent court rulings
   2.    Pending changes in transfer pricing guidelines for multi-nationals
3. Review of important aspects of Fifth Protocol to tax treaty
4. Canada’s conversion to IFRS accounting in 2007-11 period
   1.    Impact on U.S. companies
   2.    Critical tasks that must be met by 2011

Benefits

The panel addressed tax implications arising from these and other emerging developments in Canada:

• Interpretive guidance involving entity formation, use of hybrid business structures, and limitations on benefits.
• Updates or changes to regulations affecting stock sales, foreign trusts and foreign affiliates.
• Key court decisions and proposed new guidelines with a material impact on transfer pricing policy.
• Continuing adjustments to the terms of the tax treaty Fifth Protocol.

Following the speaker presentations, there was an opportunity to get answers to your specific questions during the interactive Q&A.

The webinar provided attendees a thorough briefing on material recent developments with policy guidance, regulatory changes and court rulings in Canada that affect US companies and business entities with income tax obligations north of the border.

Duane is an associate in the Tax & Trusts Group. His practice focuses on general corporate income tax law for both domestic and international tax issues. His tax experience includes international tax planning, cross-border tax issues and transfer pricing matters.