International Taxation (LAW349H1S)

This course is an introduction to the Canadian taxation of persons and entities engaged in cross-border income-earning activities. The course will examine the Canadian tax rules relating to international taxation and discuss their evolution in the context of international initiatives seeking to achieve global consensus on the appropriate method of allocating tax revenues among jurisdictions. 

Due to the nature of the subject, there is a very strong focus on the taxation of corporations and corporate groups carrying on multinational business activities. A basic understanding of Canadian corporate law and corporate taxation principles is essential. 

Introductory classes consider the traditional bases for asserting jurisdiction to tax income: the residence of the income earner and the geographic source of the income. We then cover the sources of international tax law, which include the Income Tax Act, jurisprudence, administrative practice, bilateral tax treaties, and multilateral instruments and initiatives. 
 
Next, we consider domestic and tax treaty rules governing the taxation of non-residents of Canada on income that has a Canadian source.  We then examine the taxation of Canadian residents on income earned outside of Canada and the mechanisms that are available to reduce or eliminate double taxation.    

The final segment of the course is devoted to international tax avoidance and to the complex and interrelated regimes designed to prevent the erosion of the Canadian tax base, including the foreign affiliate and transfer pricing rules. We also address the mechanisms that are available to resolve international tax disputes between taxpayers and tax authorities, and between tax authorities in Canada and elsewhere.