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 49 directors are more concerned about repu- tational risk. "There is almost a moral tone now put forward by politicians that every- one should pay their fair share," he says. When Roy Berg started practising 20 years ago, the global economy wasn't as pro- found as it is now. "Things are more interna- tional in flavour and largely because of that we've seen the demand for international tax services really increase dramatically," says Berg, director of U.S. tax law at Moodys Gartner Tax Law in Calgary. "A mom-and- pop bicycle shop can become an interna- tional concern with international tax issues as they bring in their component parts and when they go to sell them across borders." Berg tells the story of helping a client recently who raised a considerable amount of money to invest in income-producing residential real estate in the U.S., taking advantage of the then-high loonie, and depressed real estate market south of the border. "He got some tax advice in the U.S. because that's where the capital was to be deployed and the advice he received was to structure the investment a certain way. Then he came to us to get a blessing of the structure and I just about spit out my cof- fee," he recalls. "There's usually a number of right ways to structure those investments and a bunch of wrong ways and he had done it the exact wrong way." Berg advised his client the advice he received in the U.S. side was good if he had only been a U.S. investor and not Canadian. "The resulting net effective tax rate to him and his investors in this invest- ment was over 100 per cent on income. That means if he earned net $100 in rental income it would cost $102 in tax," says Berg who worked some tax magic and got the 102-per-cent rate down to 40 in Alberta. "You have to tiptoe amongst lots of different tax laws to maximize profits and minimize expenses and that's where we come in." The amount of money on the line in big tax cases has greatly increased — 15 years ago a tax case of $1 million was big, today $1-billion cases are not infrequent. And when it comes to break-the-bank tax mat- ters and who they go to for advice, Lefebvre says clients are looking to specific lawyers for help — not necessarily their usual firm. "They will seek to deal with the person who they think is the best to deal with the issue, especially in transfer pricing cases," he says. Tax is also taking on a more central role from a planning perspective, says Claire Kennedy, a partner at Bennett Jones LLP. "We're also seeing more tax disputes with higher dollar amounts associated with them and more tax controversy work, which extends from the administrative level man- aging the audits and dealing with appeals," she says. "I can't think of a recent experience where the tax person gets called in shortly before closing to bless something already baked. The tax people are a key part of the deal team from the genesis of the file." She agrees there are a few factors driv- ing the shift. "In particular of late, with the OECD and G20 initiative on base erosion and profit shifting you're seeing a heightened sensitivity to reputational risk in international tax planning and in the closely related area of transfer pricing." Kennedy says all of those factors bring recognition to the need for "bespoke tax planning" and a movement away from tax-savings products or traditional off- the-shelf planning. REFLECTING ON YOUR SPECIALTY REFLECTS WELL ON YOU. Enhance your expertise – and your value – by focusing on what interests you most. Taught by leading academics and top practitioners, our Professional LLM in Tax Law offers you the unparalleled fl exibility to study with a network of your peers while working full time. STUDY ON SITE AT OUR CONVENIENT DOWNTOWN TORONTO FACILITY, OR VIA VIDEOCONFERENCE – COURSES INCLUDE: > Tax Policy, Statutory Interpretation and the Foundations of the Taxation of Individuals > Tax Administration and Litigation > The Taxation of Trusts and Estates > Advanced Taxation of Corporations and Shareholders > International Taxation > Overview of US Taxation and Recent Developments > Managerial Tax Planning > Partnerships and Tax Shelters > Taxation of Financial Instruments > Tax Treaties Professional legal education the way it was meant to be. To learn more or to register for an Information Session, visit www.osgoodepd.ca today. A WORLD LEADER IN LAW SCHOOL LIFELONG LEARNING Osgoode's Professional LLM in Tax Law Apply Now. Start Fall 2015. New! Available full-time as well as part-time. ntitled-6 1 2014-12-10 4:31 PM

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