62 | LEXPERT • June 2019 | www.lexpert.ca/usguide
Cross-boarder
Taxation
CORPORATIONS
ARE MEETING NATIONAL
CHALLENGES ON TAXATION
BY SANDRA RUBIN
Tax
Which would you choose? If it's the
latter, you're not alone. Many companies,
especially large multinational businesses
with operations around the world, are
looking to shi revenue from high-tax ju-
risdictions to those that are less so through
bilateral tax treaties or agreements.
Foreign buyers are taxed at a signifi-
cantly lower rate even on earnings claimed
in Canada.
John Brussa, a partner and chair of
Burnet, Duckworth & Palmer LLP in
Calgary, says while he doesn't know the
exact number of bilateral tax treaties
Canada has with low-tax jurisdictions, it
is "in the double digits.
"You wouldn't think of Luxembourg,
for example, as a tax haven. But it is, much
Garry Kasparov wrote, "Playing chess,
I learned the dramatic effect combin-
ing humans and machines. Humans have
intuition, can recognise patterns and
positions, and machines have brute-force
of calculation and memory. By bringing
these capabilities together in other walks of
life, we can achieve incredible results."
Imagine you're a US company purchas-
ing an asset in Canada. You have a choice:
you can buy it through your own compa-
ny or create a Canadian subsidiary with
all applicable taxes going forward. Or you
can create a foreign entity in a low-tax ju-
risdiction to buy the Canadian company,
and keep at least a portion of the tax-
able income outside of Canada Revenue
Agency jurisdiction.
PHOTO:
SHUTTERSTOCK
