Government Establishes Advisory Panel On Canada’S System Of International Taxati

The Panel’s objectives are to: * improve the fairness, economic efficiency and competitiveness of Canada’s system of international taxation, as outlined in Advantage Canada; * minimize compliance costs for business and facilitate administration and enforcement by the Canada Revenue Agency; and * develop practical and readily-applicable changes, taking into account existing rules and tax treaties as well as fiscal implications. The Panel will be chaired by Mr. Peter Godsoe, who was Chief Executive Officer of the Bank of Nova Scotia from 1993 to 2003 and its Chairman from 1995 to 2004. He currently acts as director on the boards of many large Canadian corporations, including Barrick Gold Corporation, Onex Corporation and Rogers Communications Inc. Mr. Kevin Dancey will act as Vice-Chair. Mr. Dancey is President and CEO of the Canadian Institute of Chartered Accountants and former CEO and Canadian Senior Partner of PricewaterhouseCoopers. Mr. Dancey served as Assistant Deputy Minister, Tax Policy Branch of the Department of Finance, from 1993 to 1995. In addition to the Chair and Vice-Chair, Mr. James Love, Mr. Guy Saint-Pierre, Ms. Cathy Williams and Mr. Finn Poschmann have been appointed to the Panel. Together, they have an impressive record of experience and knowledge in business and the international tax field. The Panel will commence its work early next month. In the interim, the government will appoint an additional tax practitioner to the Panel. “I thank the panel members for their time, commitment and valued input,” said Minister Flaherty. “Their task will be challenging, but I believe it will lead to a tax system that is internationally competitive, encourages further investment and strengthens the economy.” The Panel will be seeking the participation of the business community in organizing a series of roundtables. The Panel will submit its final report to the Minister of Finance by December 1, 2008. Interested parties will be invited to submit views for consideration by the Panel. Further details on making submissions will be provided by the Panel shortly. Short biographies, as well as the Panel’s mandate, are attached. ... Budget 2007 announced significant policy changes that will provide a new direction to Canada’s system of international taxation in the years to come. Building on the measures announced in Budget 2007 and explained in the Anti-Tax-Haven Initiative, and within the general framework and policies defined by the existing system, the Panel is specifically asked to: * provide an assessment of Canada’s system of international taxation with regard to the above-mentioned objectives, and to identify and document, through further study and consultations, issues that arise under the current system; * identify and assess possible options to address these issues (including their fiscal impact); * present detailed and specific recommendations for consideration by the government as to which actions, beyond those already announced, should be implemented in the future, and in what order of priority. The Panel will review issues related to the taxation of inbound direct investment, such as “debt dumping”, thin capitalization rules and non-resident withholding taxes, and the taxation of outbound direct investment, such as the foreign affiliate and foreign accrual property income rules and the treatment of foreign branches. In identifying existing issues, the Panel will provide an up-to-date description of the transactions and tax strategies entered into by Canadian multinational businesses and foreign businesses that invest in Canada. It is also asked, in identifying and assessing possible options, to consider how other developed countries have dealt with these issues and the extent to which this international experience may be relevant to the Canadian situation. ... http://www.fin.gc.ca/news07/07-092e.html

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