Canadian Taxation of Foreign Affiliates

Stephen J. Kees was Chief Librarian, Niagara College of Applied Arts and Technology, Welland, Ontario.

As Canadian companies have expanded outside our boundaries they have established subsidiary companies or acquired interests in companies in other countries. The objective of these efforts is to produce profits for the parent company, but the existence of such profits brings them within the scope of the Canadian tax laws. As with much corporation tax law, the provisions relating to foreign affiliate companies are complex. In this work, three partners in a leading accounting firm set out and explain the taxation situation relating to such affiliate companies in all their activities. The complexity of the law is illustrated by the fact that the appendices containing the relevant portions of the Income Tax Act, the Interpretation Bulletins, and the Regulations occupy nearly as many pages as the explanation. For those readers requiring up-to-date guidance in this area, there is no doubt that this commentary and explanation will be most useful. However, one suspects that there will not be many such readers.