US Developments May Raise Canadian Tax on US Owned Canadian Subs

If Canada’s Global Minimum Tax Act (the “Draft Act”) — intended to bring Pillar 2 into Canada — is passed, next year’s US elections or a forthcoming Supreme Court decision in Moore v. United States may trigger a Canadian tax on Canadian subsidiaries of US multinational groups that have global revenue of at least €750 million on profits that have no nexus to Canada or to Canadian taxpayers.

Pillar Two, a plan to impose a tax rate of at least 15% on all multinationals that have an annual revenue of at least €750 million, was developed and promoted ...