IKN

children of an idle brain

Mailbag on the Silver Wheaton (SLW) tax post of last night

My kill-time-while-waiting-for-plane rant on the tax issues faced by Silver Wheaton (SLW) published yesterday evening has elicited some very interesting mails from you guys out there, with both sides of the potentially contentious debate covered. I thank you all for the feedback but the best so far is from “Reader S”, who has given me permission to publish an excerpt from his mail. Read and enjoy:

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“Canadian tax law is quite
different than the US (and other countries), in that revenue Canada issues
guidelines in many cases and not hard and fast rules. 

They do this so that both
individuals and corporations can’t just “skirt” the rules or easily
find loopholes.

It is a long standing policy
of the CRA that if a corporate structure is setup just to avoid paying taxes,
the CRA will “see through” that corporate structure to see who the
beneficiaries are. That is the law, and it’s been like that for
ages in Canada. CRA basically goes, “we don’t care what your legal
paper work says, we care about what is actually going on.”

If SLW conducted most of its
business out of Canada and just sent the checks/wires through the Caymans, that
should never have passed the sniff test and the only thing surprising in terms
of what revenue Canada is doing, is how long it’s taken them to go after SLW.
 

In this particular instance,
this doesn’t seem like a case of government overreach (i’m no fan of
government) but a case of corporate incompetence in how they conducted their
business.”

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