Doing Business In Canada

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Contact

Address:
2225 Sheppard Avenue East
Atria III, Suite 1001
Toronto, Ontario
M2J 5C2

Tel: +1 416-498-9500
Fax: +1 416-498-9501

Address:
Exchange Tower
2300-130 King St W
P.O. Box 233
Toronto
ON  M5X 1C8  Canada

Tel: +1 416594-9500
Fax: +1 416-594-9501

email: taxpros@cadesky.com

 

Cadesky and Associates LLP is an independent tax advisory firm dedicated to providing Canadian, U.S. and international tax services to clients, both in Canada and abroad.  It is one of the largest independent tax consultancy firms in Canada.  Though a Chartered Accounting firm, Cadesky and Associates LLP does not provide accounting or auditing services.  This approach has allowed the Firm to remain independent and objective when providing tax services to clients.  Through our extensive contacts across Canada we can ensure that any accounting or auditing needs of clients are properly addressed and referred to the best possible party.

The Firm was founded in 1996 by Michael Cadesky, FCA  and Grace Chow, CA, ACCA  and has grown to include five partners and over 20 senior tax staff.

About our founding partners, Michael Cadesky and Grace Chow. Both are builders and over the years have built a number of relationships and organizations.  The firm was started with the goal of providing a single specialized focus of expertise, taxation.  This was and is a radical departure from the typical accounting firm and, as such, it has set the Firm apart for its uniqueness.

In addition to forming  and building Cadesky and Associates LLP, Michael and Grace were instrumental in forming

1) The Tax Specialist Group (TSG).  The Firm founded TSG in 1999.  TSG is a network of tax specialist firms in 10 cities across Canada.  It allows the Firm to draw upon the expertise of members when needed.

2) The International Tax Specialist Group (ITSG).  ITSG is an international network of tax specialist firms in over 30 countries.  Membership is  by invitation. Member firms must be primarily tax advisory firms, not generalists.  This approach allows the network to excel in providing top notch international tax advisory services to our clients.

3) The Society and Trust and Estate Practitioners (STEP).  Michael is a past Chairman (2004-2006) of STEP Worldwide and a past Chairman (1998-2004) of STEP Canada.  Grace Chow is also a past Chair of STEP Canada.  Both Michael and Grace were instrumental in building STEP in Canada.  The Canadian chapters are amongst the largest in the worldwide and this expansion can be traced back to Michael and Grace's efforts. Partners of  Cadesky and Associates LLP   remain active members of STEP both in Canada and at the international level.

4) Lee, Cadesky & Company Limited, International Tax Consultants, Hong Kong.  As companies expand, beyond Hong Kong, into mainland China, they need advisors to assist in many aspects    along the way.  This is a joint venture between Cadesky and Associates LLP and Thomas Lee and Partners Ltd. a Hong Kong based International Tax, Trust and Business Advisor Firm.

Not only was the Firm instrumental in developing and growing their Canadian and international tax networks (and continued to do so), but the Firm has built a number of service areas within the Cadesky family.  These include:

1) Scitax Advisory Partners LLP.  Scitax is a Canadian professional services firm with specialist expertise in all aspects of planning, preparing and defending Canadian Scientific Research and Experimental Development (SR&ED) tax credit claims. They offer a multi-disciplinary  team of engineers, chartered accountants, tax specialists and tax litigation lawyers to ensure that client's SR&ED tax credit issues are covered from every angle.

2) Richler and Tari, Tax Lawyers.  Our  relationship with this tax law firm gives our clients access to legal representation should this be necessary and, where warranted, allows for client-solicitor privilege.  In particular, Richler and Tari can assist our clients in appeals in Tax Court and beyond.

3) C/A Valuations Inc. provides a wide range of valuation services for tax purposes, disputes, fairness opinions, and other purposes.

4) Cadesky and Associates LLP also works closely with the New York City based Ruchelman Law Firm.  This strategic alliance allows the Firm to address U.S. tax issue for clients expanding to the U.S.

Through its national, international and strategic alliances, Cadesky and Associates is able to offer a full suite of tax services to clients.  For United Kingdom businesses looking to expand into Canada, the following services may be particularly relevant.


Purchasing an existing Canadian business

Before purchasing a business, a tax evaluation is always required. Questions such as whether to purchase assets or shares, or possibly a hybrid, are important considerations. There are also opportunities to "step up" the cost of underlying assets purchased, to minimize taxes in the future.

A due diligence review of past tax filings may also be a prudent step. We can provide this review and summarize our findings in a report, quickly and efficiently.

Canada does not allow for consolidated income tax returns, so tax planning is often necessary to match the profits from the business with losses from other sources or interest expense on loans taken out to acquire the business. We can advise on this planning and help to implement it after the purchase.

We will work closely with your legal counsel to coordinate the tax planning with the required legal documentation, and can also assist in structuring the financing of the purchase.

We can also assist in negotiating the purchase, structuring creative arrangements if need be, such as earnouts, sale and leaseback transactions, share-for-share exchanges, and management buyouts.


Sale of a Business

Tax issues are paramount in selling a business to maximize the after-tax return to the shareholder. We  will evaluate the various ways of selling a business to determine the most tax-effective overall plan and:

  • design the transactions required to put the tax planning in place;

  • assist with reviewing the legal documentation;

  • assist in negotiating the terms of sale, with particular emphasis on tax issues involved;

  • complete all necessary tax filings and tax elections.


Corporate Reorganizations

There are many reasons companies may need to be reorganized:

  • to amalgamate or combine companies in order to use the profits of one company against the losses of another (consolidated filing is not permitted in Canada);

  • to create holding companies for creditor-proofing reasons;

  • to divide the assets of a corporation among the shareholders (referred to as a butterfly reorganization);

  • to incorporate a business, so that it may be carried on in corporate form;

  • to transfer a business from a corporation to a partnership;

  • to carry out an estate freeze in the most effective manner;

  • to simplify a group of companies or eliminate inactive companies that are no longer useful; or

  • to change the nature of a corporation's income (from investment income to active income or vice versa).

We can advise on whether a corporate reorganization is required, the benefits of such a reorganization, and the disadvantages, if any. We can develop a plan to implement the corporate reorganization, and work with legal counsel to execute the plan. We will also prepare the required tax-reporting forms, and produce a reporting letter summarizing the reorganization. For all of this work, we provide a precise cost estimate.


Non-Resident Investment in Canada

Through our international connections (the aforementioned ITSG Network),, we are often asked to assist non-residents who wish to invest in Canada. This may take the form of a real estate purchase for investment or development, or an equity investment in a Canadian business (private or public -see above). We can advise on the tax implications of the investment; how to structure it using a corporation, trust, or other entity; and whether to make use of Canada's international tax treaty network.

In these types of assignments, we

  • liaise with the client or the client's professional representatives to determine the objectives of the investment, how it will be financed, and the necessary background information concerning the client's overseas operations;

  • present a tax-planning proposal for discussion;

  • assist in implementing the proposal, work with legal counsel (if required) to complete the acquisition, and attend to various legal filings;

  • monitor the ongoing operations of the investment, and advise from time to time as to appropriate tax strategies; and

  • assist in structuring the sale of the investment, if and when required, to minimize the Canadian tax implications.

In handling this kind of assignment, we are pleased to work with the client's existing professionals or, where required, to call on our international contacts for assistance.


Tax Planning for New Immigrants to Canada

Canada offers generous tax exemptions and incentives for new immigrants. We are very experienced in advising new immigrants on how to take maximum advantage of these exemptions and incentives. We closely coordinate this tax planning with professional advisers in the immigrant's country of origin.

With appropriate planning, a tax exemption can be obtained for up to five years on foreign income and capital gains, using a non-resident trust. Plain and simple, we are one of Canada's foremost experts in structuring these trusts and can also refer the client to professional trustees in offshore jurisdictions who will handle the management and administration of the trust. Specifically, in tackling such an assignment we

  • review the immigrant's assets, sources of income, and personal situation to determine the most appropriate tax planning;

  • prepare a memorandum indicating the recommended tax planning strategy, along with detailed steps for implementing the plan;

  • introduce other professionals in offshore jurisdictions, as appropriate, to carry out the tax planning (which may involve creating offshore companies and/or offshore trusts);

  • provide a tax opinion concerning the planning that attests to the acceptability of the overall plan for Canadian tax purposes;

  • prepare all required Canadian filings, which may include Canadian personal income tax returns and special foreign reporting forms;

  • review the client's overall estate planning objectives to make sure they are appropriate, and assist the client in designing new Canadian wills;

  • assist in ongoing taxation issues, such as ways of receiving remuneration or a foreign inheritance; and

  • handle any disputes with the ax authorities, and act as liaison on behalf of the client.

In addition, we assist with restructuring the overall tax planning when the five-year tax-exempt period expires, or should the immigrant choose to leave Canada at any time. We take a strategic approach to these assignments, with a long-term focus on tax minimization and wealth preservation.

Sometimes valuations are required in this type of work. If so, we can supply valuation reports in a format that is acceptable to Canadian tax authorities.


Summary

The above mentioned services are but a few of value added tax services that Cadesky and Associates can provide.  We have highlighted those which we believe would be of interest to U.K. enterprises looking to Canada.  For a full description of our capabilities, we invite you to look at our website www.cadesky.com.

Cadesky and Associates is dedicated to providing the highest quality, value driven tax services available.  All partners and senior staff have "cut their teeth" with larger international accounting and law firms but chose to work in a smaller environment that allows partners to actively stay involved with their clients.   All assignments are partner led.  They are not handed down to junior staff who are just learning the ropes.

We welcome the opportunity to meet with you as you consider, what is obviously a major step, in expanding into Canada.  We know you won't be sorry that you took the time to get to know us.