Canada’s decision to deviate from global norms in targeting cross-border tax avoidance structures would weaken investment and raise costs for companies, especially those working with entities in the US, tax professionals say.
Canada’s Department of Finance is examining feedback on a draft bill aimed at hybrid mismatch arrangements—business plans that exploit differences in tax treatment across jurisdictions. The proposal wouldn’t just needlessly raise taxes and legal fees, but is also too broad and would capture common US-Canada tax arrangements not intended as targets under international guidance, several practitioners said.
“Rules that create double taxation, produce anomalous results, and impose significant …