Tax Law Definition
Canadian tax law is a highly challenging, stimulating, and pivotal part of business law practice of and among the major law firms. That is the case whether the reference is to the Canadian domestic tax statute, or the roughly 100 double tax and tax information exchange agreements to which Canada is a party, or the informal role that the tax-related work product of the OECD plays in Canada.
Canada has a relatively high (tax) rate system. This sees aggregate federal and provincial rates of up to 32% for corporations – but with many provinces moving toward a combined rate of 25% next year or the year after. For individuals, rates go up to 50%.
The system provides constant opportunities for law firms to advise clients in either a proactive fashion – that is structuring transactions from the tax standpoint – or a protectionist, reactive fashion – that is responding to and opposing government tax claims which are considered to be unfounded or otherwise objectionable.
Undoubtedly the most exciting, difficult and complex tax advice and service requirements pertain to merger and acquisitions, in particular where the deal has a cross-border, international element, either "outbound" or "inbound." The tax planning for any of the parties (whether acquirer or target) in respect of target-related disposition gains or go forward taxation of the target provide tax practitioners with a wide scope to bring creative solutions to client needs.
International M&A often brings into play, as part of a law firm's integrated and proactive tax law services, the most controversial, contentious, and fact-intensive aspect of international tax practice, namely the field of pricing cross-border intercompany sale of goods, provision of services, licensing (or other transfers) of intangibles, and group financing-through loans or guarantees. Such "transfer pricing" issues also arise in the on-going operations of MNEs or in relation to non-M&A investment and expansion.
The foregoing should not be seen as negating the challenging Canadian tax practice assignments and mandates that arise in the purely domestic business transaction (including M&A) context.
Davies Ward Phillips & Vineberg LLP
Canadian tax law is a highly challenging, stimulating, and pivotal part of business law practice of and among the major law firms. That is the case whether the reference is to the Canadian domestic tax statute, or the roughly 100 double tax and tax information exchange agreements to which Canada is a party, or the informal role that the tax-related work product of the OECD plays in Canada.
Canada has a relatively high (tax) rate system. This sees aggregate federal and provincial rates of up to 32% for corporations – but with many provinces moving toward a combined rate of 25% next year or the year after. For individuals, rates go up to 50%.
The system provides constant opportunities for law firms to advise clients in either a proactive fashion – that is structuring transactions from the tax standpoint – or a protectionist, reactive fashion – that is responding to and opposing government tax claims which are considered to be unfounded or otherwise objectionable.
Undoubtedly the most exciting, difficult and complex tax advice and service requirements pertain to merger and acquisitions, in particular where the deal has a cross-border, international element, either "outbound" or "inbound." The tax planning for any of the parties (whether acquirer or target) in respect of target-related disposition gains or go forward taxation of the target provide tax practitioners with a wide scope to bring creative solutions to client needs.
International M&A often brings into play, as part of a law firm's integrated and proactive tax law services, the most controversial, contentious, and fact-intensive aspect of international tax practice, namely the field of pricing cross-border intercompany sale of goods, provision of services, licensing (or other transfers) of intangibles, and group financing-through loans or guarantees. Such "transfer pricing" issues also arise in the on-going operations of MNEs or in relation to non-M&A investment and expansion.
The foregoing should not be seen as negating the challenging Canadian tax practice assignments and mandates that arise in the purely domestic business transaction (including M&A) context.
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