Canada/U.S. Cross-Border Tax Planning

Overview

Canadian and U.S. corporations engaged in cross-border operations, including financings, acquisitions and divestitures, face unique and complex tax issues. To ensure dealings are structured to maximize tax efficiencies and minimize tax liabilities, businesses must be aware of and comply with all relevant tax legislation and regulations on both sides of the border.  With today’s climate of increased scrutiny from both tax authorities and the public, the potential reputational and financial impacts of non-compliance cannot be underestimated.

Perhaps most imperative, however, is the need for strategic, sophisticated and integrated advice that takes into account U.S. federal and state taxation laws and how they interact with Canadian tax planning strategies and guidelines. Ultimately, it’s critical that the corporation obtains reliable and consistent guidance that results in the business reducing its tax burden, taking advantage of available tax incentives and refunds, and repatriating its profits at a manageable tax cost. 

Clients involved in cross-border business activities benefit most from tax advisors who can reconcile the differences between Canadian and U.S. laws and deliver integrated tax planning guidance on developing innovative cross-border acquisition, operating and exit structures. Osler’s taxation practice group handles a significant amount of cross-border activity in key areas such as emerging companies (financings and acquisitions), cross-border tax planning, Canadian pension funds investing in U.S. assets, transactional insurance matters and mid-market cross-border M&A. This experience enables Osler to provide comprehensive guidance; clients can obtain all of their business-critical advice from a single firm – an efficient and cost-effective solution.

In particular, the lawyers in our innovative and creative tax advisory practice

  • provide Canadian clients with advice on U.S. federal income tax treatment of cross-border and domestic transactions and multinationals. We advise on structuring and operating transactions, including M&A, financings, restructurings, public company stock acquisitions, joint ventures, project financings, cross-border security issuances, inbound and outbound securities, real estate and private equity partnerships, as well as the tax-efficient repatriation of profits

  • assist clients with inbound and outbound tax planning considerations, including treaty-based planning, international joint ventures, permanent establishment considerations and the development of innovative cross-border structures

  • possess particular expertise advising Canadian companies with U.S. operations on all aspects of the Foreign Account Tax Compliance Act (FATCA), the Canada-U.S. intergovernmental agreement (IGA), the overall effect of FATCA on Canada and the interaction of the IGA and Canada’s Income Tax Act. In addition, we offer direction on FATCA considerations that investment entities, including pension plans, care about and advise on the applicability and consequences of the full spectrum of relevant U.S. tax codes and legislation

  • specialize in the development and implementation of customized tax-efficient cross-border financing arrangements

Representative work

Osler has provided cross-border taxation advice to both Canadian and U.S. corporations from a broad range of sectors, including energy, telecommunications, manufacturing, private equity, big tech, financial institutions and pension funds.

The Canadian corporate clients our lawyers have represented include

  • large, public issuers headquartered in Canada who are doing business in the United States, have significant U.S. assets, are engaged in U.S.-based joint ventures and/or are making significant investments in the United States

  • Canadian clients of all sizes on the acquisition/disposition of U.S. targets, and on U.S. debt and equity financings (i.e., emerging, mid-market, and large public and private companies)

  • Canadian governmental and private pension funds in structuring and negotiating their investments (e.g., hedge funds, private equity funds and other private investment vehicles), including designing co-investments and direct investment structures in the United States and globally

  • private equity fund sponsors on the U.S. tax aspects of fund formation, management and operation

In addition, we have acted on behalf of U.S. clients acquiring or disposing of Canadian targets as well as U.S.-based clients in need of domestic tax expertise regarding spin-offs, tax-free and taxable reorganizations and acquisitions, and the structuring, operating and unwinding of joint venture arrangements.

 

Taxation

 

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Related Expertise

Paul Seraganian

New York Managing Partner
New York

Jennifer Lee

Partner, Taxation
New York

David R. Hardy

Partner, Taxation
New York
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International Tax Review

  • International Tax Review, World Tax Guide, 2019: Osler’s Tax practice group is ranked Tier 1 (Canada) and lawyers recognized as leaders in Tax.
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