Flaherty Set To Unveil Canadian International Tax Review Panel

by Mike Godfrey, Tax-News.com, Washington

27 November 2007

Canadian Finance Minister, Jim Flaherty has indicated that he is close to revealing the names of those who will serve on a government advisory panel, which will suggest where improvements can be made to Canada's international taxation regime.

Flaherty told reporters after a speech in Toronto on Monday that he had hoped to name the membership of the panel last week, but there was "one missing piece" that still needed to be put into place. The Finance Minister was hopeful that the full panel will be named later this week.

The international tax panel was one of the announcements made by Flaherty in his 2007 budget speech earlier this year. It has been created to examine areas in which the taxation of international transactions can be improved to make Canada a more favorable location in which to conduct international business, and give it a competitive edge over its trading partners.

According to Flaherty, the panel is comprised of "of very highly qualified Canadians who are going to do some important work for our country". However, he added that he was not in a position to confirm or deny speculation that the panel would be chaired by Peter Godsoe, the former Chief Executive of the Bank of Nova Scotia.

Canada's Conservative government recently announced some legislative improvements to its international tax regime as part of the budget laws implementation process, including a proposal to eliminate withholding tax on arm’s length outbound interest payments to residents of all countries, effective January 1, 2008. Together with new amendments to the tax treaty Canada has with the United States, Flaherty says that the new proposals will increase access to foreign capital markets, and reduce costs for Canadians and Canadian businesses that borrow from foreign lenders.

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