U.S. tax reform: How it will impact Canadian businesses

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U.S. tax reform is here after U.S. President Donald Trump signed off on the last version of the most sweeping overhaul of the U.S. tax code in decades (the Bill). Now that U.S. tax reform has become law, we are at the beginning of a major overhaul of the U.S. taxation system, with most of the key provisions becoming effective on January 1, 2018. The changes included in the final legislation (known as the “Tax Cuts & Jobs Act”) have turned decades-old norms on their heads. Some of these key changes announced in the sprawling and ambitious Bill include lower corporate rates, immediate expensing, limiting use of net operating losses and more.

As a result, Canadian businesses with cross-border ties need to be cognizant of the economic landscape ahead. As with many landmark legislative enactments, there will be winners and losers and plenty of growing pains, but these changes will also present opportunities for fresh thinking about how cross-border businesses and investments should be structured, capitalized and operated.

Far from being bystanders in this process, Canadian businesses are major stakeholders in U.S. tax reform. The Canadian economy is deeply integrated with the U.S. economy and paradigm shifts in U.S. taxation will hit the bottom lines of corporate Canada. 

While it is difficult to predict the precise impact U.S. tax reform would have in relation to the Canadian economy, we expect the effects will be profound and broad, reaching across all industries. These changes may well shift thinking, create new economic incentives and, for the prepared, create opportunity. That’s why it’s crucial for businesses to remain cognizant of updates in policy and keep thinking about how to position themselves and make informed choices in response to such a transformative event as tax reform. 

Osler’s commitment to our clients is to support and collaborate with Canadian businesses going through this once-in-a-generation transition. As Canadians grapple with what this all means to them, we will share our insights and perspectives to help clients engage in fresh thinking about their cross-border strategies and find opportunity in this new environment.

We will keep this page updated as key events unfold so check back regularly.

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2022 U.S. Tax Legislation Forecast

Forbes - January 5, 2022

Both corporate and wealth taxes were part of the discussion in 2021. The first part of 2022 is expected to be dedicated to resurrecting the Build Back Better Plan. Discussions about the taxation of cryptocurrency are also anticipated this year. 2022 U.S. Tax Legislation Forecast 

How the $1.75 trillion Build Back Better plan could impact Americans’ taxes

CNBC - November 24, 2021

The proposed tax changes would primarily impact very wealthy Americans. Corporations would be subject to a minimum tax, and companies with a large international footprint would have their foreign earnings taxed at a higher rate. Tax reforms from the Democrats' Build Back Better Act, explained

Final U.S. tax regulations transform cross-border financing 

Osler, Hoskin & Harcourt LLP - April 13, 2020

On April 7, 2020, the IRS and Treasury Department announced long-awaited final and proposed regulations addressing hybrid financing arrangements. Read more

U.S. corporate tax reform catches up to global trend

AFP – August 7, 2018

U.S. tax reform has essentially reversed long-held tax-related assumptions, Osler partner Paul Seraganian tells the Association for Financial Professionals (AFP). Read more.

U.S. tax reform hits Canada

Canadian Lawyer - April 23, 2018

The U.S. Tax Cuts and Jobs Act will have a “far reaching” impact on Canadian businesses, as Osler partner Paul Seraganian tells Canadian Lawyer. Read more.

Canadian banks warn about negative fallout from U.S. tax reforms

CBC News – February 13, 2018

The new U.S. tax reform measures could have a negative impact on Canada’s economy, according to Canadian banks. Read more.

U.S. tax reform to bring double taxation to some Canadians

Financial Post – February 6, 2018

Paul Seraganian, Managing Partner of Osler’s New York office, says the “behaviour of U.S. capital” is one consequence of U.S. tax reform to watch for. Read more. *Note: This article is available to Financial Post online subscribers only. 

U.S. tax reforms present challenges

Law Times – January 29, 2018

Paul Seraganian, Managing Partner of Osler’s New York office, tells Law Times that the Tax Cuts and Jobs Act “has changed the cost benefit analysis of investing in the U.S.” Read more.

New U.S. tax rules alter competitive landscape

Canadian Property Management – January 23, 2018

Paul Seraganian, Managing Partner of Osler’s New York Office, characterizes the recently adopted U.S. Tax Cuts and Jobs Act as “the biggest transformation in the last 30 years.” Read more.

U.S tax reform for Canadians: The Tax Cuts and Jobs Act of 2017 (Webinar)

Osler, Hoskin & Harcourt LLP – January 9, 2018

This presentation by Paul Seraganian, Managing Partner of Osler’s New York Office, and Jennifer Lee, a partner in Osler’s Taxation Group, explores the new U.S. tax landscape in detail and outlines the implications for Canadians. Read more.

The brave new (tax) world: What Canadians should know about U.S. tax reform

Osler, Hoskin & Harcourt LLP – January 5, 2018

Now that U.S. tax reform has been enacted into law, we are at the beginning of a major reset in how U.S.-Canadian cross-border tax planning will be done. This Update explains, in detail, what Canadians need to know about the final legislation, known as the “Tax Cuts & Jobs Act.” Read more.

Trump’s tax bill: U.S. Senate passes reform legislation

BBC News – December 20, 2017

The most sweeping overhaul of the U.S. taxation system in several decades has been approved by the U.S. Senate. Read more.

U.S. tax revamp still incomplete as Republicans eye social program cuts

Reuters – December 8, 2017

Republicans have begun shifting their focus to possible cuts to social programs before the completion of their overhaul of the U.S. tax code. Read more.

Senate Republicans pass sweeping overhaul of U.S. tax code

The Guardian - December 2, 2017

The U.S. Senate voted to pass its tax plan on Saturday, signalling the largest U.S. tax code overhaul in three decades. Read more.

Senate GOP clears another hurdle on the way to tax reform vote

CNBC – November 29, 2017

The Senate voted to begin a Republican tax bill debate, in a major step towards a potential overhaul of the U.S. tax system. Read more.

U.S. tax reform for busy Canadians (Part 2 – Senate Update)

Osler, Hoskin & Harcourt LLP – November 15, 2017

The U.S. Senate Finance Committee released a 103-page summary of its U.S. tax reform proposals. This Update provides a brief summary and insight into what this means for Canadian businesses. Read more.

U.S. stocks set to extend losses amid tax reform uncertainty

Financial Times – November 10, 2017

U.S. stocks have dipped amid the uncertainty surrounding the status of U.S. tax reform. Read more
*Note: This article is available to the Financial Times online subscribers only. 

U.S. tax reform for busy Canadians

Osler, Hoskin & Harcourt LLP – November 6, 2017

The U.S. House Committee on Ways and Means released H.R. 1, or the Tax Cuts and Jobs Act, on November 2. If enacted, this bill would have a deep impact on Canadian businesses and investors with U.S. operations or assets. This Update summarizes key events and provides insights into what these changes mean for Canadians. Read more.

Republicans aim to slash corporate tax rate to 20% in reform

Financial Times – November 2, 2017

A sweeping overhaul to the U.S. taxation system unveiled by Republicans Thursday includes slashing the corporate tax rate to 20%. Read more.

GOP leaders unveil key details in new tax plan

CNN – November 2, 2017

House Republicans are unveiling key details of their tax reform legislation, which would permanently lower the corporate tax rate, among other proposals. Read more.

IMF sounds caution on U.S. tax reform: Don’t raise the deficit

Bloomberg – October 10, 2017

The International Monetary Fund is urging the Trump administration not to increase the deficit when devising a plan for U.S. tax reform. Read more.

Trump-Corker spat complicates drive for tax reform in U.S. Senate

Reuters – October 9, 2017

A feud between U.S. President Donald Trump and Republican Bob Corker could impede the path to tax reform in the U.S. Read more.

U.S. tax reforms would leave renewable energy out in the cold

Bloomberg Markets – October 3, 2017

While business leaders are excited over the prospects of U.S. tax reform that would include lower corporate rates, the renewable energy sector appears to be not so keen. Read more.

An “America First” tax reform: Potential impact on Canadian companies

Osler, Hoskin & Harcourt LLP – September 28, 2017

The U.S. released a nine-page framework outlining key areas on U.S. tax reform. Canadian companies with cross-border ties will need to be cognizant of how these potential changes could impact their business. Read more.

Trump’s tax plan to propose deep U.S. rate cuts, lacks revenue details

CNBC - September 27, 2017

Part of U.S. President Donald Trump’s proposed tax plan includes lowering tax rates on businesses. Read more.

Trump proposes U.S. tax overhaul, stirs concerns on deficit

Reuters - September 27, 2017

On Wednesday, a sweeping tax reform plan was brought forward by U.S. President Donald Trump. Read more.

CEOs optimistic on tax reform, making plans for more hiring

The Hill - Sep 19, 2017

As potential tax reform looms, CEOs in the U.S. demonstrated plans to boost hiring to a six-year high, according to the Business Roundtable CEO Economic Outlook Index. Read more.

U.S. Senate Republican tax chief wants dividend deduction in tax reform

U.S. News - Sep 19, 2017

Senator Orrin Hatch, Chairman of the Senate Finance Committee, is championing the idea of allowing U.S. corporations to deduct dividend payments to shareholders from federal income tax. Read more

Proposed U.S. tax reform bad for Canadian oil industry, report says

CBC News - Sep 13, 2017

Canada’s oil sector may be negatively impacted by U.S. President Donald Trump’s tax-reform proposal, according to a report released by School of Public Policy. Read more.

Ryan: Tax reform outline coming in 2 weeks

U.S. News - Sep 13, 2017

An outline of the U.S. tax reform plan will be released near the end of September, according to House Speaker Paul Ryan. Read more.

‘Big Six’ member says tax reform blueprint to follow Senate hearings

Reuters - Sep 11, 2017

The Trump tax reform plan will be shared with other lawmakers after Senate hearings on overhauling the U.S. tax code, according to a U.S. Republican senator. Read more.

Trump’s meeting with tax negotiators kicks off fall reform push

Politico - Sep 5, 2017

When President Donald Trump sits down Tuesday with tax reform negotiators from his administration and Congress, they’re hoping it will mark the start of a final push to get legislation to Trump’s desk before the year is through. Read more.

U.S. tax change proposals anger builders, real estate agents, charities

CNBC - Aug 14, 2017

With U.S. Congress members focused during their August recess on finding ways to lower the corporate tax rate, industry groups and other sectors of society are gearing up to fight proposed changes to the personal income tax. Read more.

White House plans to release tax reform framework in September: sources

CNBC - Aug 11, 2017

The White House plans to release a brief document in early- to mid-September outlining a framework for overhauling the U.S. tax code, according to three sources familiar with the matter. Read more.

Factbox: Many pieces to tax reform puzzle for Trump, U.S. Congress

Reuters - Aug 10, 2017

President Donald Trump and congressional Republicans, fresh from their failed push to repeal Obamacare, are now tackling a project that has eluded Washington for 30 years - tax reform. Read more.

What real tax reform could be

The New York Times - Aug 8, 2017

Real tax reform would entail more than just cutting taxes, but the net result could be a fairer and more productive system, according to this New York Times editorial. Read more.

R.I.P. border adjustment tax: Canadian implications

Osler, Hoskin & Harcourt LLP - Jul 28, 2017

The hotly contested border adjustment tax (BAT) will not be included in U.S. tax reform, key Republican leaders from the White House and Congress confirmed on Thursday. While there is still rampant uncertainty about the shape that U.S. tax reform will take, the knowledge that this reform process will proceed without the BAT is a major step forward for Canadian businesses. Read more.

Canada pleased by U.S. decision to scrap border tax proposal

CTV News - Jul 28, 2017

Canadian officials praised a decision by the U.S. government to drop a contentious border tax adjustment proposal. Read more.

Trump, Republicans kill border tax plan

Toronto Star - Jul 27, 2017

U.S. President Donald Trump and Republican leaders in Congress have agreed to kill an import-tax proposal that the Canadian government opposed. Read more.

Retailers cheer the death of the border adjustment tax

CNBC - Jul 27, 2017

The retail sector welcomed the news of the elimination of the border adjustment tax amid concerns it would have raised customer costs on goods. Read more.

Tax reform plan sees U.S. import charges scrapped

Financial Times - Jul 27, 2017

Republican leaders have eliminated an import tax which would have hindered their ambitions to form a new U.S. tax system. Read more.

U.S. tax changes loom large over cross-border deals

Osler, Hoskin & Harcourt LLP - Jul 26, 2017

While the rollercoaster effort to repeal and replace Obamacare has claimed most of the attention in Washington over the past several weeks, there have been less publicized U.S. tax developments that may profoundly affect cross-border transactions and which Canadian businesses and investors need to be aware of. We provide a short summary of these developments. Read more.

U.S. tax reform: Key signals to watch for

Osler, Hoskin & Harcourt LLP - Jul 26, 2017

The political turbulence associated with the effort to repeal and replace Obamacare has obscured the direction and timing of U.S. tax reform. Here are a few key signals that we think Canadians should be looking for as they monitor tax reform south of the border. Read more.

Republicans getting pressure from big business to move on tax reform

CNBC - Jul 17, 2017

Washington’s most powerful business groups are pushing lawmakers to move forward with tax reform. Read more.

House speaker, Trump aides vow tax reform by end of 2017

Reuters Canada - Jun 20, 2017

Republicans from the Trump administration and from Congress pledged to complete an overhaul of the U.S. taxation system by the end of 2017. Read more.

U.S. taxpayers’ input sought on tax reform

Global Tax News - Jun 20, 2017

The Senate Committee on Finance has requested input from the public on potential options for U.S. tax reform. Read more.

U.S. tax reform coming this year, Mnuchin says during Ottawa visit

The Globe and Mail - Jun 9, 2017

Steven Mnuchin, U.S. Treasury Secretary, prioritized U.S. tax reform during a trip to Ottawa, which would in turn lead Canada to reduce its own tax rates. Read more.

The House Freedom Caucus wants a tax reform package that will include welfare reforms but not a tax on imports or a border adjustment tax. Read more.

Top U.S. business lobby warns of ‘substantial’ risk if tax reform fails

Financial Times - Jun 6, 2017

A top lobby group in the U.S. says a failure to reform the tax system in the U.S. could inflict damage on the economy by upending hiring and investments by big companies. Read more.

U.S. executives tell Congress they want permanent tax reform

Reuters - May 18, 2017

Corporate executives pushed for lawmakers to pursue a permanent tax reform package that avoids expanding the federal deficit as a way to encourage economic growth in the U.S. Read more.

Treasury’s Mnuchin says he still hopes for tax reform this year

Reuters - May 18, 2017

Steven Mnuchin, U.S. Treasury Secretary, said he still believes the Trump administration can complete U.S. tax reform this year. Read more.

Mnuchin weaves in tax reform, with trade talk at G7 Italy

Fox Business - May 13, 2017

U.S. Treasury Secretary Steven Mnuchin reiterated the promise for tax reform in the U.S. while attending a meeting in Italy with G7 finance ministers. Read more.

U.S. House tax committee sets first hearing on tax reform

CNBC - May 11, 2017

The U.S. House Ways and Means Committee set a May hearing on the potential impact of U.S. tax reform on economic growth for the country. Read more.

With health care victory, House Republicans ready to tackle tax reform

New York Post - May 8, 2017

House Republicans are setting their sights on U.S. tax reform after a victory on their healthcare bill. Read more.

With Obamacare vote, House Republicans free to turn to tax reform

The Economic Times - May 5, 2017

The U.S. House or Representatives plans to turn to tax reform after concluding a lengthy healthcare debate led to the repeal and replacement of Obamacare. Read more.

What’s in the Trump tax plan that promises ‘massive’ cuts

ABC news - Apr 26, 2017

The White House unveiled its long-awaited new tax reform plan on Wednesday, that included major cuts in federal taxes for businesses, while simplifying rules for individuals. Read more.

Trump unveils ‘most significant tax reforms since 1986’, but experts skeptical

The Guardian - Apr 26, 2017

The Donald Trump administration unveiled what it referred to as the biggest tax cuts ‘in history’ in a move that will slash taxes for small and large businesses. Read more.

White House proposes slashing tax rates for individuals and businesses

New York Times - Apr 26, 2017

U.S. President Donald Trump’s administration proposed to reduce individual and corporate tax rates in his tax reform plan, announced on Wednesday. Read more.

Here’s what was missing from Trump’s tax plan that Wall Street really wanted

CNBC - Apr 26, 2017

Ahead of U.S. President Donald Trump’s announcement on U.S. tax reform, an administration official told Reuters the proposal would include a sharp reduction in the tax rate from 35% to 10% for repatriation of profits. Read more.

Donald Trump says long-awaited tax reform to be announced Wednesday

Financial Post - Apr 21, 2017

U.S. President Donald Trump’s administration is set to release a tax plan for individuals and businesses as early as Wednesday, which will contain the administration’s priorities and will reveal the administration’s position on the border-adjusted tax. Read more.

Treasury’s Mnuchin: We’re ‘pretty close’ to bringing forward ‘major tax reform’

CNBC - Apr 20, 2017

Treasury Secretary Steven Mnuchin says the Trump administration will unveil a plan for “major tax reform” “very soon,” after originally tempering expectations surrounding the expected timeline. Read more.

Trump: ‘We’re going to surprise you’ with speed of tax reform

CNBC - Apr 18, 2017

While Donald Trump’s top aides have tempered expectations for tax reform, Trump claimed his administration is “in very good shape” on the process. Read more.

U.S. admits Trump tax reforms will be hit by healthcare setback

Financial Times - Apr 17, 2017

U.S. Treasury secretary Steven Mnuchin says the target to get tax reform through Congress before August is “not realistic at this point.” Read more.

Trump to meet U.S. business leaders on infrastructure, tax reform

Reuters - Apr 10, 2017

U.S. President Donald Trump is meeting with two dozen chief executives to try and gain support for his infrastructure program and tax reform. Read more.

Trump administration back to square one on tax reform

Fox News - Apr 10, 2017

U.S. President Donald Trump’s administration is likely to miss the August deadline for a complete tax overhaul set out by Treasury Secretary Mnuchin. Read more.

Investors will be waiting ‘a long time’ for U.S. tax reform under Trump, professor warns

BNN - Apr 3, 2017

A university professor says U.S. President Donald Trump needs to show he can work with Congress before tax reform gets a green light. Read more.

U.S. markets shift focus to Trump’s tax reform plans

The Globe and Mail - Mar 26, 2017

After acknowledging defeat on the health care bill, U.S. President Donald Trump said Republicans would likely pivot to tax reform next. Read more.

U.S. tax reform plan could have currency spillover effect: IMF's Obstfeld

Reuters - Mar 13, 2017

International Monetary Fund chief economist Maurice Obstfeld says Donald Trump’s proposal to overhaul the U.S. tax code could have ripple effects on other economies. Read more.

Senate Republicans eyeing alternative tax reform plan

The Hill - Mar 12, 2017

Senate Republicans are eyeing other options to Speaker Paul Ryan’s tax reform package that includes a border adjustment tax. Read more.

Exclusive: Trump says Republican border tax could boost U.S. jobs

Reuters - Feb 24, 2017

Donald Trump praised a border adjustment tax being championed by Republicans in Congress as an avenue to boost jobs, but he did not specify whether he will endorse the proposal. Read more.

The U.S. “Big Border Tax”: A primer for Canadians

Osler, Hoskin & Harcourt LLP - Feb 16, 2017

Amid the swirling political winds of the early days of the Trump administration, there is growing speculation that the President may throw his support behind the House Republican Conference’s “Better Way” Blueprint (the Blueprint) for tax reform in the United States. Read more.

Trump to Fox News: I think tax reform will be done this year

CNBC - Feb 5, 2017

U.S. President Donald Trump told Fox News that tax reform — a key component in his presidential campaign will be implemented this year. Read more.

A note on the impact of Trump’s presidency on cross-border business

Osler, Hoskin & Harcourt LLP - Nov 10, 2016

The election of Donald Trump as U.S. President could have a profound impact on both U.S. and domestic foreign policy. One of the areas where we anticipate profound and early refocusing is tax policy. With republicans controlling the House of Representatives and the Senate, as well as the White House, the prospects for meaningful domestic and international tax reform are strong. Here we analyze the impact on Trump’s presidency on cross-border business. Read more.

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