Canada Budget Tackles Tax Avoidance by Insurers, Sales Tax Fraud

Canada said it plans to amend a tax avoidance law to prevent insurance multinationals from shifting income made in Canada to offshore jurisdictions.

The Department of Finance said in a budget released Tuesday it would modify the country’s foreign accrual property income rules to clarify that income from insuring risks in Canada, like the investment of collected insurance premiums, is covered by the rules, regardless of whether that income is shifted overseas.

“In contrast, some taxpayers have taken the position that the specific FAPI rule does not apply to such investment income arising on such assets,” the department said. ...