U.S. tax reform hits Canada — Canadian Lawyer

Apr 23, 2018

Osler partner Paul Seraganian tells Canadian Lawyer that he predicts “a more level playing field” resulting from the U.S. Tax Cuts and Jobs Act (the Act), signed into law in December 2017. In her article, author Elizabeth Raymer examines some of the major provisions included in U.S. tax reform and their impact on Canadian businesses. Paul, Managing Partner of Osler’s New York office who specializes in Canada/U.S. cross-border tax planning, discusses the “far reaching” corporate tax changes.

The Act “resets the playing field for domestic competition in [the] U.S. and removed the structural disadvantages that foreign companies had,” Paul tells Canadian Lawyer. “That’s far reaching, across industries, asset classes and life stages of companies.”

Paul also notes the importance of the U.S. market for Canadian companies, and how their ability to compete against U.S. businesses is now “significantly downgraded” due to the higher corporate income tax imposed by Canada.

“A lot of the long-standing tax-planning advantages Canada has enjoyed over the past 20 years were significantly scaled back in this tax reform,” Paul tells Canadian Lawyer.

Paul also says that “it’s clear that a lot of the norms of tax planning are back on the table and subject to discussion again.” In the context of M&A transactions, he says that “under the old tax-planning norms, you would almost always choose a non-U.S. based company. Now, it’s not clearly reversed, but you’re having longer, more protracted discussions.”

For more information, read Elizabeth Raymer’s article “U.S. tax reform hits Canada” in Canadian Lawyer.