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ARTICLE · 08 OCTOBER 2012

Tax Proposals In Canada May Impact On Multi-National Enterprises

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The Department of Finance (Canada) released draft legislation (the "Proposals") on August 14, 2012 which amend provisions of the Income Tax Act (the "Act") originally announced as part of the 2012 Budget.

CanadaTax
Christopher Steeves
Christopher Steeves
Kevin Yip
Kevin Yip
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The Department of Finance (Canada) released draft legislation (the "Proposals") on August 14, 2012 which amend provisions of the Income Tax Act (the "Act") originally announced as part of the 2012 Budget. Of significance are new provisions now known as the foreign affiliate dumping rules that could cause adverse tax consequences to many transactions involving Canadian corporations with foreign subsidiaries. The Proposals apply to a broad range of domestic and international transactions and particularly affect transactions where a foreign controlled Canadian corporation makes an "investment" in its foreign subsidiary.

We encourage Canadian corporations that are part of a foreign based multi-national enterprise ("MNE") and that have foreign investments to review their current and planned transactions to minimize the impact of the Proposals.

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