Session1
Fundamentals & Hot Topics
Angelo Nikolakakis, Partner, Couzin Taylor LLP
9:00- 10:00
Understanding the Basic Building Blocks of the Canadian Foreign Affiliate Rules
Michael Friedman, Partner, McMillan LLP
Canadian taxpayers that hold equity interests in foreign corporations are frequently entitled to claim preferential Canadian tax treatment in respect of dividends received from such corporations. Conversely, Canadian taxpayers may also be subject to Canadian income tax on an accrual basis in respect to certain forms of passive income earned by controlled foreign affiliates. This session will explore many of the foundational concepts that underpin the Canadian foreign affiliate regime.
General overview of the Canadian foreign affiliate regime
What is a "foreign affiliate"?
What is a "controlled foreign affiliate"?
How do you compute a taxpayer's "equity percentage" in a particular corporation?
Section 113 deductions in respect of dividends received from foreign affiliates
10:00-11:00
Impact of Tax Treaties
John G. Lorito, Partner, Stikeman Elliott LLP
Given the rapid growth in international trade and commerce, the Canadian tax practitioner must keep up with the changes affecting Canada’s network of international tax treaties. This discussion will look at the most recent and interesting tax treaty issues in the context of foreign affiliates.
Tax treaties
Tax information exchange agreements
Determining the "treaty residence" of a foreign affiliate
Non-qualifying country and income from non-qualifying business
Electronic commerce and intangibles
11:00-11:30 NETWORKING BREAK
11:30- 12:30
Intensive Extended Session: Reorganization of Foreign Affiliates
Angelo Nikolakakis, Partner, Couzin Taylor LLP
A key element of foreign affiliate planning is ensuring that they are structured in such a way as to minimize global tax costs, whether at the earnings stage, the disposition stage, or at the repatriation stage. This discussion will focus on the various techniques to reorganize foreign affiliate structures.
Foreign affiliate liquidations and other distributions
Foreign affiliate mergers
Asset transfers between foreign affiliates
Session2
Planning Issues
Angelo Nikolakakis, Partner, Couzin Taylor LLP
1:30-3:00
Intensive Extended Session: Financing of Foreign Affiliates
Angelo Nikolakakis, Partner, Couzin Taylor LLP
This interactive discussion will take a detailed and critical look at the latest developments surrounding tax-effective financing opportunities with respect to foreign affiliates, exploring the opportunities and pitfalls associated with these arrangements.
Tax considerations when financing active business operations
Recent technical changes and CRA pronouncements
Key sections: 95(2)(a), 17, and proposed “upstream loan” rules
3:00-4:0
IP Considerations for Foreign Affiliates
Lou Milrad, Principal, Milrad Law Office
What are the benefits of holding IP and/or conducting research and development through foreign affiliates? Should you transfer your technology to a foreign affiliate? This presentation will examine these questions and associated considerations.
Choosing a jurisdiction for IP ownership
Strategies to minimize taxes on exporting IP
Use of cost sharing and other arrangements
Effective planning using inter-affiliate licensing and similar arrangements
Strategies to repatriate IP back to Canada
4:00-4:15 NETWORKING BREAK
4:15-5:00
Foreign Exchange Implications & Planning
Robert Raizenne, Partner, Osler, Hoskin & Harcourt LLP
Companies with multinational operations need to develop long-term strategies to help minimize the impact of foreign exchange volatility. This discussion will look at various foreign exchange planning strategies in the foreign affiliate context.
General treatment of foreign exchange gains and losses of foreign affiliates
Specific arrangements and associated treatment and pitfalls
Direct debt and direct equity financing
Inter-affiliate financing
General principles for computing FX implications
Hedging transactions
Session3
Acquisitions & Reorganizations
Penny Woolford, Partner, KPMG LLP
9:00- 10:30
Intensive Extended Session: Foreign Affiliate Acquisitions
Carrie Smit, Partner, Goodmans LLP
This presentation will cover the foreign affiliate tax consequences arising on an acquisition of a foreign affiliate, with particular emphasis on the tax consequences arising on the acquisition of control of a Canadian parent corporation.
Foreign holding corporations
FAPI analysis and residency considerations
Acquisition of Canadian parent corporation
Paragraph 88(1)(d) bump issues
Paragraph 95(2)(f.1)
11:00- 12:00
Intensive Extended Session: Planning For the Sale of Foreign Affiliates
Penny Woolford, Partner, KPMG LLP
This presentation will address the Canadian tax issues to be considered by a taxpayer in selling shares of a foreign affiliate. The focus will be on identifying and achieving the principal tax objectives of the sale.
Overall tax minimization on gains
Effective utilization of any losses
Tax-efficient redeployment/repatriation of the proceeds from the sale
Update on recent technical developments
10:30-11:00 NETWORKING BREAK
12:00- 12:30
Proposed Foreign Affiliate Dumping Rules
David P. Stevens, Partner, Gowling Lafleur Henderson LLP
In August 2012, the Department of Finance released draft legislation that included revised foreign affiliate dumping proposals that were originally introduced in the 2012 federal budget. These new rules, intended to discourage foreign-based multinationals from dumping foreign affiliates into their Canadian subsidiaries, could have major tax impacts for foreign controlled Canadian corporation making an investment in its foreign subsidiary. This session will discuss these proposals, their implications for Canadian corporations and steps to take to minimize their negative impact, including:
Overview of new FA dumping rules: situations where they apply
Tax consequences of new proposals: deemed dividends, reduction of paid up capital
Exceptions to the application of a deemed dividend or PUC reduction
FA investments subject to the FA dumping rules
Current status and timing of the proposals
How to mitigate or avoid the application of the new rules
12:30-1:30 LUNCH
Session4
Effective Strategies
Abigail Kan, Tax Principal, McGovern Hurley Cunningham LLP
1:30- 2:30
Intensive Extended Session: Making Sense of the FAPI Rules
Ryan Michalski, Senior Manager International Tax, Ernst & Young LLP
Abigail Kan, Tax Principal, McGovern Hurley Cunningham LLP
Salvador Borraccia, Tax Director, GO LLP
The "foreign accrual property income" (FAPI) rules are complex, with legislative amendments and evolving case law adding to the confusion. Changes to the law have also offered some additional tax-planning opportunities to those with a clear understanding of the regime. This discussion will review a number of the issues associated with the FAPI rules as well as certain opportunities that they provide.
Income from property: general; investment business; 95(2)(l); income from an adventure in the nature of trade; incidental income
Income from a business other than an active business: 95(2)(a.1); 95(2)(a.2); 95(2)(a.3) & (a.4); 95(2)(b)
Income from a non-qualifying business
Capital gains: excluded property; foreign exchange
Exclusions: 95(2)(a); 95(2)(f.1)
Deductions: foreign accrual tax; 91(5) & 92
3:00- 3:45
Repatriating Profits and Capital
Sandra Slaats, Tax Partner, Deloitte LLP
This presentation will take a close look at tax-effective strategies for repatriating profits and capital of foreign affiliates, including specific strategies involving the tax-efficient flow of dividends from foreign affiliates.
Repatriation of capital to Canada
Dividends from exempt surplus, taxable surplus and hybrid surplus
Alternative strategies to return funds to Canada, including the impact of the new upstream loan rules
2:30-3:00 NETWORKING BREAK
3:45-4:30
Structuring Foreign Affiliates
Ron Nobrega, Partner, Fasken Martineau DuMoulin LLP
This discussion will provide an overview of alternatives for structuring foreign affiliates to minimize taxes payable on a global basis by Canadian-based multinationals. Some specific strategies will also be considered, including:
Holding structures for operating subsidiaries
Financing and insurance arrangements
Active business income strategies
Optimizing benefits available under Canada's tax treaties
Optional workshops:
Reorganization of Foreign Affiliates
Philippe-Antoine Morin, Senior Associate, Couzin Taylor LLP
The increasing trend toward globalization has necessitated that ever-greater attention be paid to the Canadian tax rules governing foreign affiliates. This highly interactive workshop will tackle the latest tax-related issues that arise during the reorganization of foreign affiliates. Topics to be covered include:
Canadian reorganizations with foreign affiliate implications
Foreign affiliate mergers
Foreign affiliate liquidations
Foreign affiliate share exchanges
Pre and post-acquisition reorganizations
Recent legislative developments
" Philippe-Antoine Morin is a Senior Associate at Couzin Taylor LLP. He is a member of the International tax practice and provides tax consulting services on international transactions, including investments inbound into Canada and outbound from Canada, mergers and acquisitions, financing as well as restructuring of foreign affiliates’ operations. "
Foreign Affiliate Financing
Clara Pham, Senior Manager, International Corporate Tax, KPMG LLP
Amanda O'Donnell, International Corporate Tax, Senior Manager, KPMG LLP
Canadian multinationals typically finance their foreign affiliates through a foreign group financing company, rather than directly. The key Canadian tax issue then is the categorization of the financing affiliate's income as between FAPI and ABI. This interactive workshop will feature case studies that bring together and demonstrate various aspects of the presentation from the first day of the conference. The workshop will also look at the pitfalls, traps and opportunities associated with various financing arrangements. Topics include:
Overview of foreign affiliate financing rules
Financing active business operations
Acquisition financing
Alternative financing arrangements
Hybrid financing arrangements
Traps, opportunities and pitfalls
" Clara Pham is a Senior Manager, International Corporate Tax, at KPMG LLP in Toronto. Clara has broad experience serving predominantly Canadian-based multinational corporations in various industries. She has experience with cross border and international financing structures, mergers and acquisitions, divestitures and restructurings.
Amanda O'Donnell is a Senior Manager, International Corporate Tax, at KPMG LLP. Amanda practices in the area of federal corporate income tax, focusing on cross-border mergers and acquisitions, reorganizations and structured finance. She has advised many public and privately-held companies located across eastern Canada and the U.S. on their international tax strategies and structures, and M&A transactions. "