ARTICLE
28 April 2008

Canada Reviews International Tax System

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Borden Ladner Gervais LLP

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BLG is a leading, national, full-service Canadian law firm focusing on business law, commercial litigation, and intellectual property solutions for our clients. BLG is one of the country’s largest law firms with more than 750 lawyers, intellectual property agents and other professionals in five cities across Canada.
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.
Canada Tax

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.

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