On April 25, 2008, the Advisory Panel established by the
Canadian Government following on the 2007 Budget initiative to
study Canada's international tax system and make
recommendations for change, issued its first report in the form
of a Consultation Paper entitled "Enhancing Canada's
International Tax Advantage".
The Consultation Paper earmarks for further review a number of
areas which will affect Canada's taxation of cross-border
inbound and outbound investments, in particular: expansion of
the exemption system for foreign affiliate dividends and
capital gains arising from the sale of foreign affiliate
shares; changes to Canada's thin capitalization rules;
withholding tax exemptions for non-arm's length interest,
royalties, and dividends on substantial shareholdings; measures
to counteract treaty shopping; and changes to simplify
administration. The Panel invites written submissions from
interested parties on "all issues and options relevant to
the taxation of international business" until July 15,
2008.
A copy of the Consultation Paper is available on the
Panel's website at:
http://www.apcsit-gcrcfi.ca/05/cnpdcn-eng.html.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
