"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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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: