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Foreign companies purchasing assets in Canada often have a choice of purchasing the assets through their own company or through the creation of a Canadian subsidiary that pays all applicable taxes going forward. Or, it can create a foreign entity in a low-tax jurisdiction to purchase the Canadian company, and at least a portion of the taxable income will not fall into the jurisdiction of the Canada Revenue Agency.

Many companies, especially large multinational businesses, look to shift revenue from high-tax jurisdictions to other countries through bilateral tax treaties or agreements.

Foreign buyers are taxed at a significantly lower rate even on earnings claimed in Canada.

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Lexpert contributor Sandra Rubin reports at www.lexpert.ca. Follow @Lexpert on Twitter.

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