Canadian tax amendments proposed on August 14, 2012 (the
Proposals) could adversely affect common acquisition structures for
acquiring Canadian corporations with foreign subsidiaries.
Investments in foreign subsidiaries by existing, foreign-controlled
Canadian corporations are also affected. This summary provides a
brief overview of the Proposals and common examples of where they
could potentially apply. For a more detailed summary of the
Proposals, see our
Osler Update from August 16, 2012.
OVERVIEW
Subject to certain exceptions, the Proposals generally apply
where a foreign corporation controls a Canadian corporation that
makes an investment in a "foreign affiliate". For this
purpose, an "investment" in the foreign affiliate is
broadly defined to include acquisitions of debt or equity
securities, contributions to capital, extensions of the maturity or
redemption date of debt or equity securities, and conferrals of
benefits. An investment in a foreign affiliate
