Financial reporting and accounting advisory services
You trust your external auditor to deliver not only a high-quality, independent audit of your financial statements but to provide a range of support, including assessing material risks, evaluating internal controls and raising awareness around new and amended accounting standards.
Accounting Standards for Private Enterprises
Get the clear financial picture you need with the accounting standards team at Grant Thornton LLP. Our experts have extensive experience with private enterprises of all sizes in all industries, an in-depth knowledge of today’s accounting standards, and are directly involved in the standard-setting process.
International Financial Reporting Standards
Whether you are already using IFRS or considering a transition to this global framework, Grant Thornton LLP’s accounting standards team is here to help.
Accounting Standards for Not-for-Profit Organizations
From small, community organizations to large, national charities, you can count on Grant Thornton LLP’s accounting standards team for in-depth knowledge and trusted advice.
Public Sector Accounting Standards
Working for a public-sector organization comes with a unique set of requirements for accounting and financial reporting. Grant Thornton LLP’s accounting standards team has the practical, public-sector experience and in-depth knowledge you need.
Tax planning and compliance
Whether you are a private or public organization, your goal is to manage the critical aspects of tax compliance, and achieve the most effective results. At Grant Thornton, we focus on delivering relevant advice, and providing an integrated planning approach to help you fulfill compliance obligations.
Research & development, government incentives
Are you developing innovative processes or products, undertaking experimentation or solving technological problems? If so, you may qualify to claim SR&ED tax credits. This Canadian federal government initiative is designed to encourage and support innovation in Canada. Our R&D professionals are a highly-trained, diverse team of practitioners that are engineers, scientists and specialized accountants.
Keeping track of changes and developments in GST/HST, Quebec sales tax and other provincial sales taxes across Canada, can be a full-time job. The consequences for failing to adequately manage your organization’s sales tax obligations can be significant - from assessments, to forgone recoveries and cash flow implications, to customer or reputational risk.
Global mobility services
In today’s competitive and global marketplace, your employee mobility strategy is a critical factor for success. International opportunities are key to attracting top talent and instilling a global mindset across your organization. Your people truly are your most valuable asset, and as your expatriate workforce continues to grow, a seamless global mobility program is essential to achieving your overall business goals.
US corporate tax
The United States has a very complex and regulated tax environment, that may undergo significant changes. Cross-border tax issues could become even more challenging for Canadian businesses looking for growth and prosperity in the biggest economy in the world.
Cross-border personal tax
In an increasingly flexible world, moving across the border may be more viable for Canadians and Americans; however, relocating may also have complex tax implications.
While there is great opportunity for businesses looking to expand globally, organizations are under increasing tax scrutiny. Regardless of your company’s size and level of international involvement—whether you’re working abroad, investing, buying and selling, borrowing or manufacturing—doing business beyond Canada’s borders comes with its fair share of tax risks.
Transfer pricing is a complex area of corporate taxation that is concerned with the intra-group pricing of goods, services, intangibles, and financial instruments. Transfer pricing has become a critical governance issue for companies, tax authorities and policy makers, and represents a principal risk area for multinationals.
Succession & estate planning
Like many private business owners today, you’ve spent your career building and running your business successfully. Now you’re faced with deciding on a successor—a successor who may or may not want your direct involvement and share your vision.
Tax Reporting & Advisory
The financial and tax reporting obligations of public markets and global tax authorities take significant resources and investment to manage. This requires calculating global tax provision estimates under US GAAP, IFRS, and other frameworks, and reconciling this reporting with tax compliance obligations.
Our transactions group takes a client-centric, integrated approach, focused on helping you make and implement the best financial strategies. We offer meaningful, actionable and holistic advice to allow you to create value, manage risks and seize opportunities. It’s what we do best: help great organizations like yours grow and thrive.
We bring a wide range of services to both individuals and businesses – including shareholders, executives, directors, lenders, creditors and other advisors who are dealing with a corporation experiencing financial challenges.
Market-driven expertise in investigation, dispute resolution and digital forensics
Viruses. Phishing. Malware infections. Malpractice by employees. Espionage. Data ransom and theft. Fraud. Cybercrime is now a leading risk to all businesses.
Running a business is challenging and you need advice you can rely on at anytime you need it. Our team dives deep into your issues, looking holistically at your organization to understand your people, processes, and systems needs at the root of your pain points. The intersection of these three things is critical to develop the solutions you need today.
Updates for creditors, limited partners, investors and shareholders.
Builders And Developers
Every real estate project starts with a vision. We help builders and developers solidify that vision, transform it into reality, and create value.
Rental Property Owners And Occupiers
In today’s economic climate, it’s more important than ever to have a strong advisory partner on your side.
Real Estate Service Providers
Your company plays a key role in the success of landlords, investors and owners, but who is doing the same for you?
There’s no business quite like mining. It’s volatile, risky and complex – but the potential pay-off is huge. You’re not afraid of a challenge: the key is finding the right balance between risk and reward. Whether you’re a junior prospector, a senior producer, or somewhere in between, we’ll work with you to explore, discover and extract value at every stage of the mining process.
Oil & gas
The oil and gas industry is facing many complex challenges, beyond the price of oil. These include environmental issues, access to markets, growing competition from alternative energy sources and international markets, and a rapidly changing regulatory landscape, to name but a few.
Flash forward four years: the world today
Since the TCJA, the world itself has changed significantly:
- Businesses around the world have adjusted operations to adapt to a global pandemic
- Many businesses now operate more globally
- There is increasing pressure for global tax reform
- The US had a new president faced with the challenge of post-pandemic economic recovery
On September 15th the House tax writers released a first cut of tax legislation that proposes more than $2 trillion in tax increases offset by more than $1.2 trillion in proposed tax cuts. In short, the first cut of legislation would provide tax breaks for Americans by increasing the amount of taxes paid by the wealthiest Americans and corporations. Although this tax proposal is nowhere near what will become final law, it does shed some light on what some of the proposed US tax changes may be.
What impact will these changes have on Canadian businesses?
Although final legislation will have a broad impact on international taxation, there are four key points Canadian-based businesses with US operations should closely monitor.
1. Increased US Corporate tax rate
The current US tax rate is 21%, with most US corporations paying combined federal and state taxes ranging from 21% to 25%. These rates are lower than the Canadian corporate tax rate, resulting in many Canadian businesses expanding and shifting more activities into the US by examining transfer pricing policies.
The current bill would introduce 3 tax brackets: 18%, 21% and 26.5%. The top bracket of 26.5% would apply to corporations with income in excess of $5 million. Canadian businesses may or may not be disadvantaged by these changes depending on a taxpayer’s level of US activities and income. Canadian businesses with significant US operations should consider the impact a tax increase may have on their global tax rate, repatriation strategies and transfer pricing policies.
2. The FDII deduction survives - for now
The TCJA introduced a tax deduction that reduced a US corporation’s overall tax rate on exports and other income from foreign sources from 21% to 13%. Although President Biden initially indicated that he planned to repeal the FDII deduction, the current bill merely modifies the FDII deduction available to taxpayers with a reduction in the total FDII benefit available to taxpayers. Assuming a 26.5% tax rate, a taxpayer’s tax rate on FDII eligible income would be 20.7% under the current bill.
At 20.7%, a FDII deduction would still result in significant tax savings for Canadian taxpayers that have, or have shifted, foreign income into the US from Canada since most Canadian taxpayers pay 26% or more on their corporate tax profits. There is still some hope that this tax break will not be repealed, but Canadian businesses should monitor this through the legislative process since Democrats are not fans of this tax incentive.
3. BEAT vs. SHIELD
The Biden Administration originally proposed the elimination of BEAT (Base Erosion and Anti-Abuse) and its replacement with SHIELD (Stopping Harmful Inversions and Ending Low Tax Developments) which included a global minimum tax in line with the OECD proposals. This bill does not eliminate BEAT but makes modifications to its scope to conform more closely with OECD principles. Notably, payments made to related parties that are subject to US tax, as well as payments to foreign parties that are subject to foreign taxes at tax rates greater than the BEAT rate, can be excluded from the BEAT provisions. These changes, although in line with OECD principles, are less significant than initially proposed where taxpayers would lose the benefit of deductions for payments made to related parties in a low tax jurisdiction. Large Canadian businesses would likely benefit from some modelling with respect to their intercompany payments to determine how these changes would impact their overall US tax bill.
4. Interest expense deduction limitations
The House also proposes a new limit on interest deductions for domestic corporations that are members of a multinational group that have annual interest expenses exceeding $12 million. The US taxpayer would only be able to deduct its “allowable percentage” of the group’s total net interest expense under the proposals. This “allowable percentage” would be based on the US taxpayer’s earnings in comparison to consolidated earnings.
The denied interest expense under this new rule, as well as the current interest expense limitation provisions of Section 163(j), would also only be available for carryover for future deduction for five tax years. Currently, interest expenses that are denied deduction carryover indefinitely. This change in deduction limitation and carryover may result in Canadian businesses losing deductions for payments made to Canada and other jurisdictions where taxes are paid on the corresponding interest income. As such, Canadian businesses with US operations will want examine planning options to ensure deductions aren’t lost.
It’s likely that these proposals will be modified, changed or removed from the final tax bill that will ultimately become law as the legislation works its way through both the House and the Senate before landing on President Biden’s desk for signature. Taxpayers should monitor the legislative process to see what changes might be in store. Learn more about the house tax bill in our article.
Continue to visit our US tax page for the latest developments and their impact for Canadian businesses.
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