Ottawa moves to crack down on foreign tax cheats

“As the federal government attempts to widen its net on foreign tax cheats, it faces pushback from inside and outside Canada over concerns that efforts to capture more revenue could cause greater harm than good — especially to direct investment in Canada. Even critics in Canada’s biggest trading partner are urging Ottawa not to take unilateral action against so-called ‘treaty shopping’ by out-of-country companies and individuals.” Gordon Isfeld wrote for a Financial Post article. Isfeld continues “instead, one of the largest business groups in the United States, along with legal and tax experts in this country, say a coordinated global approach — such as the one now being formulated by the Organization for Economic Co-operation and Development — would avoid what the OECD warns would lead to ‘global tax chaos.’ Finance Minister Jim Flaherty is pushing ahead with plans, announced in last year’s federal budget, to crack down on foreign tax abusers — although the government admits the financial impact of treaty shopping is difficult, if not impossible, to put a value on. ‘Arrangements involving treaty shopping, like other forms of aggressive tax planning, are often not disclosed by taxpayers and, as such, their impact is difficult to measure,’ a Finance Department official told the Financial Post.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

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