If your organization has interests in one or more foreign affiliates, you know how difficult it is to keep up and fully comply with Canada’s tax rules in the area. Since 2002, companies with foreign affiliates have had to cope with two complex sets of legislation—existing and proposed—and also keep track of various revisions to the draft proposals, monitoring which of them have been changed, which have been enacted, and which remain outstanding.
The Department of Finance recently released a 200 page package of draft foreign affiliate amendments. The package includes revisions to the foreign affiliate reorganization and distribution rules originally proposed in a February 27, 2004 release. It also includes new proposals in place of the 2004 proposals which suspended certain gains from the sale of shares and other assets of foreign affiliates for the purposes of the surplus accounting rules. In addition, a number of altogether new rules have been proposed that have potentially significant implications, such as those regarding upstream loans from foreign affiliates, foreign currency gain and loss recognition and the computation of foreign accrual property income.
Do the new foreign affiliate amendments affect your company?
Join KPMG’s International Corporate Tax team for a webcast to learn about what your tax department needs to know to tax-effectively structure and manage your company’s foreign affiliate-related obligations under Canada’s foreign affiliate rules.
You can also read this special issue of TaxNewsFlash-Canada to find out the highlights of the new foreign affiliate rules and the potential implications on your business.
KPMG is here to help : Our Tax Professionals are well versed in the draft foreign affiliate amendments and can provide you with advice on these matters: