In International Tax Disputes CRA’s Greed Expensive for Canada
In international tax disputes, all the countries involved want to take the first bite of corporate tax. Corporations are getting away with paying lower tax by putting the countries against each other.Launched in December 2010, the international tax arbitrations follow the rules for settling salary disputes between Major League Baseball teams and their players. As in baseball, the two parties – revenue agents from the two countries – put forward a figure.
A third-party mediator settle disputes by picking the number they judge to be closest to the right answer. In the tax game, that’s the amount a company pays. The winning country gets the tax revenue. The losing country goes home empty-handed.
“It’s baseball arbitration: One position wins and the other one loses,” said Brian Trauman, a principal at Big Four accounting firm KPMG LLP. The cases that have been resolved have “really big dollars at stake,” he said.
Companies also prefer such showdowns as government-to-government arbitration can give them quicker tax bill certainty, in some cases allowing them to free up cash reserved for potential tax liabilities.
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Conrad Black and His Dual Citizen Tax Trouble
The colorful character and once media mogul Conrad Black is fighting a Canada Revenue Agency Tax Assessment of $5 million income from a 2002 tax review.It all started with the Citizenship status.
Though Mr. Black was born in Canada and was appointed an Officer of Canada in 1990, he renounced his Canadian Citizenship in 2001, so that he can receive the title Baron Black from Queen Elizabeth II. Since then he filed taxes in Canada as a non-resident Canadian, because he had only UK citizenship.
But the problem is many tax payer frequently fail to understand that a Tax Citizenship and Political Citizenship are two different status and falls under different jurisdiction of law.
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Leaving France To Lower Tax
French president François Hollande’s plans to introduce a supertax of 75% on all income over one million, got many French rich and famous people to leave their country and surrender their French passport.One of the world’s most famous Frenchmen, Gérard Depardieu, is in the process of giving up his French passport and is now a Russian, after Vladimir Putin personally granted him citizenship on 3rd January.
It’s fairly clear the main attraction of Depardieu’s new domicile is its 13% flat income tax rate, since the actor has been flamboyantly fulminating for ages about French president François Hollande’s plans to introduce a supertax.
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