International Tax Planning
Navigate the tax challenges of global mobility
In today’s global economy, there are generally no country boundaries for earning one’s income from business, employment or investment. However, one needs to be wary of the resulting combined taxes owed to the governments of their home country as well as the countries from which the foreign income is sourced. One also needs to comply with the consequential domestic and foreign tax reporting requirements.
Cross-Border Taxation
Many governments tax individuals and enterprises on worldwide income based on certain criteria, while limiting the scope of their income taxation in some manner territorially or provide for offsets to taxation relating to extraterritorial income. Such systems of taxation vary widely from country to country and create the potential for double taxation (where the same income is taxed by different countries) and no taxation (where income is not taxed in any country). Thus, in carrying on any income earning activities beyond the boundary of your home country, you will have to consider the tax implications and reporting requirements of both your home country as well as the foreign country in which the activities are being carried out.
International Tax System in Canada
Generally speaking, under Canada’s international tax system, corporations and individuals resident in Canada are subject to Canadian taxation on their worldwide income. For income sourced from foreign countries, foreign tax credits or deductions may be available to eliminate double taxation of the same income by foreign governments. On the other hand, non-resident corporations and individuals are subject to Canadian taxation on their income sourced from Canada, unless relief is available under the respective treaties concluded between Canada and the countries in which the foreign persons are resident.
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International Tax Planning and Return Preparation
We are experienced working with the international tax professionals in local countries to help you manage your Canadian and international tax liabilities, with the aim of reducing the total tax burden and complying with all tax reporting requirements across all jurisdictions.
We possess the international tax knowledge and experience to assist Canadian-based businesses with operations abroad, and foreign-based businesses investing or carrying on business in Canada. We help individuals and their respective families to develop a sound cross-border financial plan to enhance their personal and family wealth, and to preserve the value of their estates.
Canadian Enterprises Expanding Outside Canada
Teaming with the international tax professionals in local countries, we provide the following services to help your enterprises manage/reduce the foreign operations’ global effective tax rate:
- Review and understand the existing foreign operations for assessing any potential tax exposures, including income, payroll, indirect and withholding taxes as well as tax reporting requirements.
- Advise on the taxation of foreign-source income, taking into consideration of applicable tax treaties, foreign tax holidays and exchange controls
- Select the appropriate business and financial structures and jurisdictions for global tax optimization of the foreign operations, based on the understanding of how the foreign operations will be operated internationally and how it will be administered outside Canada
- Develop tax-efficient strategies to
- finance existing/new operations and investments abroad
- repatriate funds to Canada
- exit from foreign markets
- Assist to establish transfer pricing policies that can make your transfer pricing commercially viable and tax efficient
- Canadian corporate tax compliance including
- tax returns to report transactions with related non-residents
- tax returns to report foreign affiliate operations
- Perform surplus calculations for foreign affiliates for effective repatriation of funds to Canada
- tax elections in respect of certain transactions with foreign affiliates
Foreign-Controlled Enterprises Investing in Canada
We provide the following services to help your enterprises manage/reduce the Canadian operation’s global effective tax rate:
- Review and understand the existing Canadian operation for assessing any potential tax exposures, including income, payroll, indirect and withholding taxes as well as tax reporting requirements.
- Advise on the taxation of Canadian-source income, taking into consideration of the applicable tax treaties
- Select the appropriate business and financial structure for global tax optimization of the Canadian operation
- Develop tax-efficient strategies to
- acquire and finance Canadian operation and investments
- repatriate funds from Canada
- exit from Canadian market
- Assist to establish transfer pricing policies that can make your transfer pricing commercially viable and tax efficient
- Canadian corporate tax compliance including
- treaty-exemption returns
- branch tax returns
- Tax audits and voluntary disclosures
Our cross-border services to individuals include:
- Personal cross-border financial planning and tax advisory
- Canadian tax compliance
Canadian Residents Leaving Canada or Investing Outside Canada
- Pre-emigration planning to become non-resident
- Financial and tax planning for Canadian residents investing in US real properties, either as income producing or vacation properties. The service scope for this kind of assignment may include a proposed acquisition plan, implementation assistance, ongoing preparation of required Canadian tax filings and consultations.
Non-Residents Coming to Canada or Investing in Canada
- Pre-immigration planning for new immigrants or international executives on a multi-years Canadian assignment
- Financial and tax planning for non-residents investing in Canada such as a real estate purchase for investment or development, or an equity investment in a Canadian business. The service scope for this kind of assignment may include a proposed acquisition plan, implementation assistance, ongoing preparation of required Canadian tax filings and consultations.
- Financial and tax planning for non-residents divesting their Canadian investments. The service scope for this kind of assignment may include a proposed divestiture plan, implementation assistance, preparation of required Canadian tax filings.