The Resource Canada's anti-treaty-shopping proposals and international treaty obligations

Canada's anti-treaty-shopping proposals and international treaty obligations

Label
Canada's anti-treaty-shopping proposals and international treaty obligations
Title
Canada's anti-treaty-shopping proposals and international treaty obligations
Creator
Subject
Language
  • eng
  • eng
Summary
Treaty shopping is a deepening global controversy with competing interests across the private and public spectrum. The Organisation for Economic Co-operation and Development (OECD) has identified "treaty shopping" as one of the most important sources of base erosion and profit shifting (BEPS) concerns. The Canadian Department of Finance announced proposals regarding domestic anti-treaty-shopping legislation (the proposals) in the 2014 federal budget. Finance released draft legislation on 29 August 2014 implementing measures from the 2014 budget but did not include the proposals. Finance stated that after engaging in consultations on the proposals, it will await further work by the OECD and the G20 in relation to the BEPS initiative. On 16 September 2014, the OECD released its BEPS recommendations, which are designed to create a single set of international tax rules to end base erosion and the artificial shifting of profits. This release included the OECD's Action 6 report. The effect of the Action 6 report on the formulation of proposed amendments (the future proposals) is unknown at this time. The premise of this article, which was originally written before the release of the Action 6 report, is that Finance will propose draft domestic anti-treaty-shopping legislation amending the Income Tax Conventions Interpretation Act7 (ITCIA) that will prevail over Canadian tax treaties to the extent that there is inconsistency. The proposals represent a profound change to Canadian international tax policy. The potential adverse effect is inestimable, especially for investors who have relied in good faith on well-established Canadian treaty policy not to mention relevant Canadian case law. In this article, the author argues that, prior to the release of the Action 6 report, there were compelling reasons why the proposals would breach Canadian legal obligations under many tax treaties and especially those treaties in force prior to the 2002 update to the OECD Model Convention adopted by the Council of the OECD on 28 January 2003 (the 2003 Commentary); moreover, the claims made in support of the proposals by Finance are not supported by the 2003 Commentary. The proposals also conflict with the OECD public discussion draft on BEPS Action 6. The author anticipates that Finance will be drafting the future proposals in a manner that will allow it to claim that it is following the Action 6 report
Citation source
In: Canadian tax journal = Revue fiscale canadienne. - Toronto. - Vol. 62 (2014),
http://library.link/vocab/creatorName
Snider, K
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • GAAR
  • international taxation
  • BEPS Project (OECD)
  • tax treaty
  • treaty shopping
Label
Canada's anti-treaty-shopping proposals and international treaty obligations
Link
https://library.ibfd.org/custom/web/SD_PDF/scans/2014/A-D/CANATAJO/3_705-728.zip
Publication
Note
20150206

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.3736660 4.9336932
Processing Feedback ...