CRA Provides Its Latest Views On Planning For Canada-U.S. Tax Treaty Changes And Other Issues

At yesterday's Canada Revenue Agency ("CRA") round table, held as part of the Canadian Tax Foundation's annual conference in Toronto, the CRA provided its views with respect to a number of topics including, among other things, branch tax implications when investing in Canada through a U.S. limited liability company (including where a U.S. resident individual is a member), Canadian permanent establishment implications where an employee of a U.S. resident provides services in Canada, the tax consequences to the issuer of exchangeable debentures and the valuation of "skinny" voting shares in the estate freeze context. The CRA also provided its view in respect of a number of planning alternatives to deal with upcoming changes to the treatment of unlimited liability companies ("ULCs") under the Canada–U.S. Tax Treaty (the "Treaty"), which are discussed below. The CRA's comments regarding Treaty issues are very timely as many U.S. residents have been considering or