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Be careful when you move business offshore.

Posted By Dan White On May 25, 2007 @ 2:10 pm In Tax Tips | No Comments

*** Just because you have opened a branch of your company by way of an IBC does not mean you will avoid Canadian taxes. There are pitfalls as noted below.

(Info from CRA web site) 

Departure tax - Section 219 There is a 25% departure tax liability under section 219.1 that applies for the tax year considered to have ended because the corporation emigrated from Canada to take up residence in a new jurisdiction. This liability is not affected by any treaty that Canada may have signed with the corporation’s new country of residence, because for the referenced year the corporation is resident in Canada only. Any branch tax that may apply to the non-resident corporation under section 219 is subject to any overriding provisions in an applicable tax treaty.


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