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Canadian attorney has spilled the beans on a harsh Canadian
tax net that could ensnare Barbados-Canada business.
Lorne Saltman, a tax lawyer, said Canada was creating a
complex tax policy “that is not clear, (is) contradictory,
(and) very uncertain for Canadian individuals who want to
use, for non-tax reasons, foreign trusts or foreign collected
undertakings”.
He noted that the initiatives were intended to prevent perceived
abuse of tax arrangements by Canadians.
Speaking after making a presentation at a forum organised
by the Society of Trust and Estate Practitioners (STEP)
at the Hilton Barbados on Friday, Saltman said in Barbados’
case “the emphasis has to be on the long term relationship
between the two countries that has particularly benefited
Barbados and Canada; (with) Canada (being) able to use this
financial offshore centre to reduce cost of capital.”
He urged Barbados to promote itself as a “beneficial
jurisdiction; one that isn’t abusing the Canadian tax
system but is actually helping to create jobs and wealth
in Canada by making Canadian companies more competitive
internationally”.
The tax expert said the United States may be backing Canada’s
move to stamp out acts like “double dipping where Canadian
multi-nationals are not only getting to deduct interest
in Canada when they borrow money from a Canadian bank but
they are also able to create offshore deductions from one
affiliate carrying on business in a high-rate jurisdiction
to another affiliate, such as in Barbados, carrying on business
in a low rate jurisdiction”.
Canada’s direct foreign investment to Barbados exceeds
CAN$66 million per annum and Saltman argued that “Canadian
multinationals that have real businesses in Barbados are
not abusive and should not be attacked.”
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