The interaction of Canada's thin capitalization rule and the Canada-United States Tax Treaty

Article Abstract:

The author explores issues surrounding the application of section 18(4) of the Canada Income Tax Act in light of the existence of the United States-Canada Tax Treaty (on income and capital). That section denies interest deductions to subsidiary corporations where thin capitalization by the parent has occurred.

Corporate Tax Deductions & Exemptions, Accounting and auditing, Affiliated corporations, Interest deductions, Subsidiary corporations, Subsidiaries, Corporate taxes

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A note on treaty re-sourcing of employment income

Article Abstract:

The author discusses the Canadian intention to disallow foreign tax credits to U.S. citizens domiciled in Canada who realize income from U.S. business trips. The U.S. alternative minimum tax would result for many such taxpayers, increasing their overall tax liability.

Tax Law, Business travel, Foreign tax credit, Minimum tax

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The taxation of foreign investments in developing countries under the treaty regime: the African experience

Article Abstract:

Tax treaties between African countries and developed nations may be constrained by capital shortages and problems encountered in creating a tax mix that attracts investment and encourages economic growth. Africans have to balance the desire to maximize taxes on foreign investments against practical considerations such as securing the agreements, maintaining the status quo, and ensuring reciprocity and compliance. Tax treaty issues such as excessive source taxation, double taxation, jurisdiction, and tax treatment of royalties, dividends, and interest, are analyzed and discussed.

Corporate Income Taxes, Foreign investments, International aspects, Developing countries, Africa, Tax policy, international

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