A CANADIAN attorney has spilled the beans on a harsh Canadian tax net that could ensnare Barbados-Canada business.

Lorne Saltman, a tax lawyer, said Canada was creating a complex tax policy "that is not clear, [is] contradictory, [and] very uncertain for Canadian individuals who want to use, for non-tax reasons, foreign trusts or foreign collected undertakings".

He noted that the initiatives were intended to prevent perceived abuse of tax arrangements by Canadians.

Speaking with BARBADOS BUSINESS AUTHORITY after making a presentation at a forum organised by the Society of Trust and Estate Practitioners (STEP) at the Hilton Barbados on Friday, Lorne said in Barbados' case "the emphasis has to be on the long term relationship between the two countries that has particularly benefited Barbados and Canada; [with] Canada [being] able to use this financial offshore centre to reduce cost of capital."

He urged Barbados to promote itself as a "beneficial jurisdiction; one that isn't abusing the Canadian tax system but is actually helping to create jobs and wealth in Canada by making Canadian companies more competitive internationally".

The tax expert said the United States may be backing Canada's move to stamp out acts like "double dipping where Canadian multi-nationals are not only getting to deduct interest in Canada when they borrow money from a Canadian bank but they are also able to create offshore deductions from one affiliate carrying on business in a high-rate jurisdiction to another affiliate, such as in Barbados, carrying on business in a low rate jurisdiction".

Canada's direct foreign investment to Barbados exceeds CAN$66 million per annum and Saltman argued that "Canadian multinationals that have real businesses in Barbados are not abusive and should not be attacked." (SR)