Number 2 - 2006 contains the following:
 

On 19 October 2005, the Supreme Court of Canada released its unanimous decisions in Canada Trustco Mortgage Company v. Canada and Mathew v. Canada -- the Supreme Court's first decisions on the general anti-avoidance rule (GAAR) in Canada's Income Tax Act. The rule, enacted in response to the Supreme Court's 1984 decision in Stubart Investments, is designed to distinguish between legitimate tax planning and abusive tax avoidance. This article reviews the Supreme Court's decisions in Canada Trustco and Mathew, in which the Court considered the various issues pertaining to the GAAR and provided important guidance on its interpretation and application.

The Swiss-EU Agreement on the taxation of savings entered into force on 1 July 2005 and applies to all dividends that fall due after that date. The purpose of the Agreement is to eliminate the withholding tax on intra-group cross-border dividend payments between Switzerland and the EU Member States. The Agreement includes Art. 15, which, among other things, grants Switzerland measures equivalent to those in the EC Parent-Subsidiary Directive. At the time of the author's earlier article on the Agreement (in the February 2005 issue of the Bulletin), questions concerning the method of applying the Agreement remained largely unanswered. Since then, Switzerland has issued various guidelines to facilitate the implementation of the Agreement. This article provides an update on the developments over the last 12 months.

The tax consequences of the choice of entity in international tax structuring can vary significantly, in particular where an entity is considered to have corporate characteristics in one jurisdiction and is thus taxed as a company, but is considered to have flow-through characteristics in another jurisdiction and is therefore taxed at the level of the participants. The Netherlands Ministry of Finance issued two decrees at the end of 2004 which address the classification of foreign entities: (a) the "entity classification decree", which deals with the classification of entities in the context of the amended EC Parent-Subsidiary Directive and updates the Ministry's policy on classifying entities as transparent or non-transparent, and (b) the "participation exemption decree", which seeks to clarify the Dutch approach to the classification of foreign entities for purposes of the Dutch participation exemption. This article first overviews the predecessor to the 2004 decrees, i.e. the 1997 "SNC decree", which contained the rules for classifying entities as transparent or non-transparent, and then examines the 2004 decrees generally and in the context of the SNC decree. The article also considers the issues arising as a result of applying the new decrees and certain EC law aspects of the decrees.