Canadian Lawyer

w w w . C a n a D I a n L a w y e r m a g . c o m J a n u a r y 2 0 1 5 47 L E g a L r E p o rt \ ta x L aw Tax guy to the rescue ax lawyers may not be the first guests you gravitate to at a cocktail party but you may want to rethink that notion. In an age when issues of tax morality, trans- parency, and tax avoidance are grabbing headlines, you'll for- give them if tax lawyers have a little more swagger in their step these days. Whether they are tax planners or litigators, they have become central players in the risk management of public and private companies. Who would have thought tax lawyers would be the new superhero in today's legal landscape, but increasingly they are, often swooping in to save clients from judgment in the global court of public opinion as well as saving them money. Many say one of the reasons tax lawyers have been propelled to centre stage is because there is so much tax competitive- ness between countries today. Everybody wants a bigger share of the pie and the question is who should get to grab it first? "The tax practice traditionally was one where the tax lawyers would work in tandem with the corporate partners but it was the corporate lawyers who had all the swagger and the tax lawyers were the geeks doing all of the paper work. But tax litigation has become a huge part of the business now," says Al Meghji a partner in the 64-lawyer tax practice at Osler Hoskin & Harcourt LLP. Meghji led the team that successfully represented GlaxoSmithKline two years ago at the Supreme Court of Canada in Canada v. GlaxoSmithKline Inc. — a monster transfer pricing battle between the pharmaceutical giant and the Canada Revenue Agency. Transfer pricing is the biggest area of tax litigation right now, says Meghji and modern tax litigation cases like Glaxo are high stakes. "There are all of these massive transfer pricing cases, massive GAAR [General Anti-Avoidance Rule] cases and the stakes are enormous. The general counsel and the CFOs take a direct interest because it can have very sig- nificant consequences for the financial well being of these companies. The size of the disputes and what's at stake has dramati- cally grown." In the last three to five years, there has been a moral dimension injected into the dialogue about corporate tax — accusations of abusive tax avoidance can be kryptonite to a company's brand. "Imagine you are a senior officer of a big corporation — you have to make judgment calls on what is acceptable tax avoidance and what is abu- sive tax avoidance. Nobody quarrels that tax avoidance is fine; you are allowed to engage in tax avoidance, but there is the idea that some of it is unacceptable," says Meghji. When it comes to fees, tax practices are not immune from the current pressure on costs but it may be easier for tax lawyers to demonstrate value to a client than in some other areas of law currently under pressure. It's not uncommon for large cases to go to RFP. "A client once said to me over lunch, 'You know Meghji, when you win, boy you are cheap, but when you lose you are ridiculously expensive.' That's true because if they win, it's a big prize for them and they have saved a lot of aggravation. If they lose T Riddle me this: Are tax lawyers the caped crusaders of corporate Canada? By Jennifer Brown peTer miTcheLL

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