Foreign Owned Canadian Corporations

Abstract

Canadian income tax rules applicable to foreign owned Canadian corporations have become increasingly complex, in part owing to the implementation of recommendations of the OECD/G20 BEPS project to address the issue of base erosion and profit shifting. This paper considers these anti-avoidance rules, including the hybrid mismatch arrangement rules, excessive interest and financing expense limitation rules and various surplus stripping rules.

Note: Excerpt from International Taxation in Canada, 5th Edition (ISBN: 9780433532255) by Jinyan Li and Paul Lamarre. Reproduced with permission. © 2024 LexisNexis Canada Inc. All rights reserved.

Keywords: BEPS, hybrid mismatch, surplus strip, back-to-back arrangements, hybrid mismatch rules