Opinion Statement ECJ-TF 3/2019 on the CJEU Decision of 22 November 2018 in Case C-575/17, Sofina, on Withholding Taxes, Losses and Territoriality

Several potentially onerous liabilities may be imposed on directors outside the provisions of the statute under which their corporation is incorporated or continued. In particular, some of the most common sources of personal liability for directors arise under statutes requiring the corporation to pay employee payroll source deductions (income tax, Canada Pension Plan contributions, and employment insurance premiums), withholding taxes owing by non-residents of Canada, and net goods and services tax and harmonized sales tax remittances. These statutory regimes all have certain features in common, including a statutory due diligence defence. This article examines the state of the law under the objective standard of care first adopted in the tax context by the Federal Court of Appeal in <i>Buckingham</i>. In particular, it examines the principles that guide jurisprudence on the due diligence defence, the factual circumstances that have met with success or failure for appellants, and how the defences apply differently depending on whether a director is an inside or outside director.

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Withholding Taxes in the Service of BEPS Action 1: Address the Tax Challenges of the Digital Economy

SSRN Electronic Journal ◽

10.2139/ssrn.2586202 ◽

2015 ◽

Cited By ~ 1

Author(s):

Yariv Brauner ◽

Andres Baez Moreno

Keyword(s):

Digital Economy ◽

Withholding Taxes

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The determinants of tax-haven use: evidence from Canada

Journal of Applied Accounting Research ◽

10.1108/jaar-01-2019-0014 ◽

2019 ◽

Vol 21 (1) ◽

pp. 142-162

Author(s):

Yosra Fourati Makni ◽

Anis Maaloul ◽

Rabeb Dabbebi

Keyword(s):

Design Methodology ◽

Probit Regression ◽

Tax Havens ◽

Content Type ◽

Financial Firms ◽

Tax Haven ◽

Alternative Measures ◽

Withholding Taxes ◽

Practical Implications ◽

Thin Capitalization

Purpose The purpose of this paper is to investigate the determinants of tax-haven use of publicly listed Canadian firms. Design/methodology/approach Based on alternative measures of tax havens (TH) and referring to a sample of 235 Canadian firms over the period of 2014–2015, probit-regression analyses are used to examine the determinants of tax-haven use. Findings The authors provide evidence that multinationality, intangible assets, thin capitalization, withholding taxes, equity-based management remuneration and tax fees paid to auditing firms are positively associated with TH use. Furthermore, the authors show that the variable relating to R&D intensity is positively associated with TH use. The authors also document that strong corporate-governance structures are negatively associated with TH use. Research limitations/implications This study is only limited to Canadian firms, so the results may not be generalizable to other countries. Practical implications The results may assist tax watchdogs in their efforts to understand the tax behavior held by Canadian firms. They may also be interesting for tax authorities in planning enforcement activities. Originality/value This study uses a sample from publicly listed financial and non-financial firms. It also uses various lists of TH published by various competent sources (IMF, 2000, 2007; TJN, 2005; OECD, 2012). The findings corroborate the recent media attention about the extensive use of TH by Canadian firms.

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