Global Tax Adviser
February 2010

US Customs Information Requests – Best Chance to Avoid Penalties?

Joseph Brick
National Leader, Trade & Customs, Toronto

Canadian companies who act as importers of record into the United States should pay careful attention to requests for information from the US customs authorities. These companies may occasionally receive a "Request for Information" form (CBP 28 form), which is used by US Customs and Border Protection to request details about transactions. Often, these forms point out a potential error or omission that can be corrected without penalty by completing a timely "prior disclosure." Read more ...

WHT Applies to Non-Cash Remuneration Paid to Non-Resident Employees

Leanne Gehlen
International Executive Services, Vancouver

The CRA stated in a recent technical interpretation that tax must be withheld on non-cash remuneration paid to non-residents out of an employee benefit plan trust, regardless of whether any cash remuneration is paid to the employee. This comment was made at the 2009 Canadian Life and Health Insurance Association (CLHIA) Round Table. Read more ...

FMC Technologies – Non-Resident WHT Catch-22 Upheld

Paul Hickey
National Tax Centre, Toronto

The Supreme Court of Canada (SCC) dismissed the taxpayers' application for leave to appeal in FMC Technologies Company v. The Queen (2009 FCA 217). In this case, a Canadian resident corporation effectively paid $2.8 million in tax twice (15 percent of $18.8 million earned income): once as tax under Part I and then again under Part XIII as a withholding tax indemnification to another Canadian corporation. Read more ...

More CRA Guidance on Canada-US Treaty's Hybrid Entity and LOB Rules

Heather O'Hagan
International Tax, Toronto

The CRA's latest issue of Income Tax Technical News (ITTN No. 41) contains further details on topics discussed at the Canadian Tax Foundation's (CTF) 2008 Annual Conference (now included in the CTF's 2008 Conference Report. The CRA also answers additional questions on the Canada-US treaty's hybrid entity and limitation on benefits (LOB) provisions that were not discussed at the conference. Read more ...

IRS to Require Detailed Reporting of Uncertain Tax Positions

Derrick Novis
International Tax, Toronto

Alex Feness
International Tax, Toronto

The IRS is developing a schedule to require certain businesses to report uncertain tax positions, as determined under GAAP or IFRS, on their US income tax returns. Under the new schedule, business taxpayers with total assets over US $10 million and reporting one or more uncertain tax positions must annually file a concise description of these positions and their magnitude. According to the IRS Commissioner, the new rules would not apply for the 2009 tax year. Read more ...

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