International Taxation
We offer technical expertise applied to complex international tax issues, grounded in a thorough knowledge of Canadian legislation and its interactions with foreign tax regimes.
Our approach is to provide rigorous, cross-border-specific analysis — ensuring compliance, effective tax risk management, and optimal tax treatment in an international context.
- Analysis of rules applicable to foreign affiliates, including the concepts of active business income and passive income
- Surplus computations (exempt, taxable, and hybrid)
- Reorganizations involving foreign affiliates
- Foreign Accrual Property Income (FAPI)
- International financing structuring (debt and equity)
- Tax analysis of partnerships in a cross-border context
- Non-resident taxation in Canada (inbound)
- Analysis and qualification of permanent establishments
- Interpretation and application of tax treaties
- Allocation of taxing rights between jurisdictions
- Withholding tax optimization
Frequently Asked Questions
Common questions about Canadian and international taxation
For informational purposes only. See disclaimer.
Generally, Foreign Accrual Property Income (FAPI) refers, under the Income Tax Act, to certain types of passive income or investment income or income requalified as such, and also interest, dividends, rents, royalties, and certain capital gains, earned by a foreign affiliate (FA) of a Canadian-resident taxpayer, subject to detailed statutory rules and adjustments. In general, FAPI is included in a Canadian taxpayer's income under subsection 91(1) in respect of a controlled foreign affiliate.
When a CFA of a Canadian resident earns FAPI in a foreign jurisdiction, the taxpayer's participating percentage of that FAPI must be included in their taxable income for the year in which it is earned by the CFA — even if that income has not been paid as a dividend.
The calculation of FAPI requires a detailed analysis of the foreign entity's income and losses, as well as underlying foreign taxes paid, which may give rise to a deduction. This regime is complex and requires expertise in both Canadian and international tax law, as well as an understanding of the tax rules in the relevant foreign jurisdiction. The rules are complex and professional advice is recommended.
Have a tax situation to work through?
Book a consultation with Akira Kamio, CPA auditor, LL.M. (Taxation), specialist in Canadian and international income tax.