Flaherty Flip Flops

Okay so when will the Conservatives back track on their failed Child Care program and reinstate funding for actual child care spaces. Oops that of course affects only Martha, Henry and the kids, not corporations and CEO's.

Flaherty backtracks on tax measure

In a reversal, Finance Minister Jim Flaherty says a new controversial tax measure will be rewritten to ensure that legitimate Canadian corporations can continue to invest abroad and deduct the interest charge from their taxes.

Under pressure to back down from a "sleeper" measure in the March 19 budget that Canadian businesses said would cost them more than $1 billion and make them less competitive, Flaherty confirmed yesterday that draft legislation being prepared by the finance department would ensure that the provision only went after tax havens and so-called double dipping.

Flaherty blitzed on Alcan bid

Nevertheless, news yesterday of Alcoa Inc.' s US$33-billion takeover bid for Alcan turned up the heat once again on Mr. Flaherty and his proposed move to limit companies' ability to deduct interest on foreign financings.

Tax specialists, business groups, blue-chip chief execdutives and think-tanks have weighed in in opposition to the move. The government has said the proposal would end the practice by some Canadian-based firms of obtaining two or more deductions for interest expenses incurred to finance offshore operations.

Last month, Richard Evans, Alcan CEO, said in a published interview that the tax change could make the aluminum maker susceptible to a foreign bid because it would hinder Alcan's ability to grow through foreign acquisitions.

SEE:

Gildan Sweat Wear

Tax Fairness For The Rich

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Merck Tax Rip Off

Merck still has a $1.76 billion tax dispute with Canadian authorities, and has filed an appeal with the Canada Revenue Agency that is expected to be reviewed this year, spokesman Raymond Kerins said.

The pharmaceutical giant disclosed both tax cases in November in a routine Securities and Exchange Commission filing. Merck said the Canadian dispute "related to certain intercompany pricing matters."

Tax and accounting analyst Robert Willens of Lehman Brothers said in such cases drugmakers generally sell medicines at low cost to subsidiaries in countries with lower tax rates, which can then mark up the prices and keep more profit after taxes.

Merck is not the only Big Pharma company to get caught out engaging in this tax swindle known as transfer pricing. It's based on off shoring ones corporation or personal taxes in a tax haven thus avoiding paying taxes in the country of operation. Something the Irving's have done for years.

We have been participating in OECD for 20 years now on transfer pricing guidelines for instance. That work is critical to having a set of international rules that work for everybody.

We do try and understand the way that businesses operate and certainly there are many needs a company will have for offshore treasury functions. We start to get a bit upset about these when we find that they aren’t really carrying out real treasury functions, that there aren’t, possibly, real people there or very few people there and very few facilities for them to do this work. That is when we get into arguments as to whether or not it is a genuinely commercial function of the group or whether or not it is some sort of tax mitigation or tax planning.

See:

Big Pharma Rip Off

The Mulroney Legacy

AIDS


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