Pedestrians walk past a Deloitte sign in downtown Ottawa on Sept. 20, 2011. The consulting firm was hired on a $20-million contract to advise the Conservative government on how to cut costs.Sean Kilpatrick/The Canadian Press
Deloitte & Touche LLP is increasingly getting into the game of fighting the taxman in court, on behalf of its clients.
The accounting firm is expanding its new Canadian tax litigation practice, hiring prominent tax litigators Cliff Rand and Dave Muha away from Stikeman Elliott LLP, and opening a Toronto office for Deloitte's own boutique law firm. The pair started in their new jobs on Jan. 1.
Deloitte, like its rival Big Four accounting and consulting firms, has long had an affiliated law firm with operations in Vancouver and Calgary. Last year, it rebranded the firm, which serves corporate clients and "high net-worth individuals," as Deloitte Tax Law LLP. Mr. Rand will serve as the firm's national managing partner.
In recent years, Deloitte Tax Law has hired former senior Canada Revenue Agency officials, as well as former Federal Court of Appeal judge Michael Ryer and Calgary tax litigator Curtis Stewart, to add to its "tax controversy" expertise.
Now with a dozen lawyers in its stable, and with about half of them concentrating on litigation, Deloitte plans to keep increasing the size of its tax litigation capabilities in Canada and elsewhere, says Heather Evans, the managing partner for Deloitte's tax practice in Canada.
The business reason behind the strategy is straightforward. Ms. Evans says the big multinational companies that make up Deloitte's client roster are now issuing global requests for single organizations to handle their increasingly complex cross-border tax problems. That means selecting Deloitte, or a large international law firm, instead of retaining local law firms to handle tax issues in each country where the company does business.
Clients are facing increasing pressure, Ms. Evans says, as tax authorities around the world are cracking down on "transfer pricing," which is one of the methods multinationals use to move some of their profits from high-tax jurisdictions and into lower-tax ones.
"Governments around the world are looking for tax revenue. They are increasingly aggressive. They are doing multi-country simultaneous audits. They are using technology in a more sophisticated way," Ms. Evans said. " ... So really the next step is to have a global platform to help taxpayers deal with these issues. And the domestic law firms, I think, are going to struggle with that."
Jeff Gray