A foreign business enterprise may choose to enter into a joint venture with a Canadian to carry on a business or a particular activity in Canada. The structure of such a joint venture may be accomplished in a number of ways and the Canadian tax consequences will depend upon the particular structure chosen.
Alternatively, the joint venture may take the form of a partnership between the Canadian and foreign participants. Canada taxes the profits of partnerships at the partner level and does not tax the partnership directly. Each of the partners of a partnership carrying on business in Canada is considered, for tax purposes, to be carrying on the business of the partnership in Canada. Accordingly, if the foreign enterprise is a partner and the partnership has an office, factory or other permanent establishment in Canada, the foreign partner will generally be taxable in Canada on its share of the partnership profits, as if it carried on the partnership business directly as a Canadian branch of the foreign enterprise. The tax consequences of a branch operation are set out under the subheading “Canadian branch operation”, above. If, on the other hand, the foreign enterprise has its Canadian subsidiary corporation enter into the partnership, the tax consequences would be as set out above under the subheading “Canadian subsidiary corporation”.
Additional posts from the blog
CASL also prohibits installing a “computer program” – including an app, widget, software, or other executable data – on a computer system (e.g. computer, device) unless the program is installed with consent and complies with disclosure requirements. The provisions in CASL related to the installation of computer programs will come into force on January 15, 2015.
On April 7, 2014, the Minister of the Environment issued a Notice with respect to hydrofluorocarbons (the “Notice”), pursuant to the Canadian Environmental Protection Act, 1999. The Notice imposes reporting requirements on those who imported, exported, or manufactured certain hydrofluorocarbons (“HFCs”) from 2008 and 2012. A non-exhaustive list of HFCs subject to these reporting requirements can be found in Schedule 1 of the Notice.
In an interesting decision, the Human Rights Tribunal of Ontario has ruled that an employer is not liable for discriminatory and harassing texts sent by a rogue employee to another of its workers.