Outbound Investment – The Foreign Affiliate Rules

Presented by the Taxation Law Section
Co-Chairs:  Brian R. Carr, Thorsteinssons LLP | Ed Kroft, Q.C., Bennett Jones LLP

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Government: $110
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Outbound Investment – The Foreign Affiliate Rules

This presentation deals with the Canadian tax consequences of outbound investment by Canadians. Its primary focus is the Foreign Affiliate Rules. The Canadian tax system taxes residents of Canada on their worldwide income, including foreign-source income, whether earned directly or indirectly. The Foreign Affiliate Rules target in particular income earned indirectly through intermediate non-resident corporations. The presentation discusses both the “what” and “when” of the Foreign Affiliate Rules, with particular emphasis on property investment returns earned by controlled foreign subsidiaries, the so-called FAPI regime. Also discussed in some detail are the manifold tax avoidance concerns which underlie Canadian tax policy with respect to indirect foreign-source income earned by Canadian residents, as well as the impact of the Foreign Affiliate Rules on the competitiveness of Canadian-based multinational corporations operating in a globalized marketplace. The presentation also positions the Foreign Affiliate Rules in relation to other international features of Canadian income tax law, e.g. transfer pricing, intragroup financing arrangements, foreign reporting rules, etc.  

Speaker

Robert Raizenne, Osler, Hoskin & Harcourt LLP