Law Times

Law TiMes • March 8, 2010 FOCUS PaGe 11 Considering the tax implications of immigrating Practitioners offer advice on scenarios individuals and businesses face BY ROBERT TODD Law Times in and out of the country on a daily basis have a full slate of worries to focus on, but experts suggest they — and the companies they work for — need to put consideration of tax obligations higher on the list. Dean Smith, principal at T Toronto tax fi rm Cadesky and Associates LLP, told immigration lawyers at the Ontario Bar Association In- stitute conference that many foreign workers lack proper advice. To illustrate this point, he recalled the story of a fi le he worked on involving a large U.S. company that had signed a contract with a Canadian telecommunications company. Th e company brought about 120 U.S. and Russian engineers to Canada during the three- year project, said Smith. All of the workers received visas to work in the country but none knew they had to fi le Canadian tax returns, and the company wasn't aware it had to make Canadian employment with- holdings. Th e Canada Revenue Agency caught wind of the situation, leaving the company with a $1-million tax liability. "To say they were a little un- happy would be an understate- ment," said Smith. "I've seen this too many times." Robert Kepes, a lawyer with Morris & Morris LLP in To- ronto, noted some of the key tax implications of residency status. Paramount to this is the fact that Canadian residents must report and pay taxes on their worldwide income from all sources. Th at means a Ca- nadian resident with a bank account in Florida that collects interest must report it here. Th ere are two diff erent levels of "resident" when it comes to the Income Tax Act, he noted. Deemed residents, the category under which most people fall, are those who sojourn in Can- ada for 183 days or more. Such individuals must report their yearly income in Canada. Conversely, factual residents may be individuals who haven't lived in the country for some time and spend fewer than 183 days here but continue to have ties and may have plans to re- turn. Kepes pointed out the courts consider factors such as past and present habits, regu- larity and length of visits, the purpose of time spent abroad, investments, business relation- ships, and family ties in deter- mining a person's status. Canada's approach contrasts with that of the United States. he thousands of Ca- nadians and foreign nationals who stream People leaving the country should be mindful of Canada's departure tax, says Robert Kepes. Citizens of that country must pay tax regardless of their place of residence. Th ere are a pair of tests to determine the tax status of Ca- nadians who live abroad but maintain ties to the country, noted Kepes. Th e fi rst consid- ers primary resident ties, such as place of residence, as well as the location of the person's spouse or dependants. Second- ary residential ties, meanwhile, include the location of personal property, social ties, economic ties, and so on. Th is can all get very muddy, said Kepes, when an individual leaves Canada and later decides to return. It's possible, of course, to be considered a resident of two countries for tax purposes. Kepes noted that Canada has treaties with most countries, including the United States, to deal with this scenario through tiebreaker rules aimed at eliminating double tax. He said factors include location of a permanent home; the person's "centre of vital interest," including so- cial and family ties; and their "habitual abode," which re- fers to the location where the person spent the most time over the past year. Citizen- ship is a fi nal tiebreaker, said Kepes. But that's not the end of the potential complications as individuals leaving the country need to be mindful of Canada's departure tax. Kepes noted this levy ad- dresses the value gained in an individual's assets between their arrival in and departure from Canada. An example, he said, might involve an American who moves to Canada and owns shares in a particular company purchased for $10. On arrival in Canada, the shares have risen in value to $100. Th at in- dividual need only be worried about any gains in the shares above $100 by the time they leave Canada, Kepes noted. People moving in and out of Canada should also be mindful of registered retirement savings plan considerations, said Kepes. One option is to collapse the RRSP before leaving the coun- try, but he urges against this as it can be taxed as high as 46 per cent. Another potential strategy is to collapse the plan after leaving and becoming a non-resident. Th at would leave a withholding tax of up to 25 per cent, said Kepes. A fi nal option for those moving to the United States is to keep the RRSP as is and fi le a form each year that allows for tax-free accumulation. LT $3.55 • Vol. 17, No. 20 Covering Ontario's Legal Scene It's what's inside that counts! It's what's inside that counts! - Class Actions - ADR/Mediation Storage/Archive Litigation Support QUALITY DOCUMENT SCANNING • Scan-to-File June 12, 2006 $3.55 • Vol. 17, No. 20 Strong Laws For Women 3 Strong Laws For Women Climb Every Mountain 3 5ally indicated that he wanted to behead the "There's an allegation that my client person- Climb Every Mountain Focus On Real Estate Law 5 here's innhelegationi that, myy clienta pierson- repre- et hfe theantedc tose behead the Focus On Real Estate Law 9 BY MARK BOURRIE For Law Times on thedes n. The court ior Can im Iy the ma the rights to famous brands will have to prove a real connection between their marks and the prod- ucts of a company that infringes original trademark, a sso rej- represenitteMtangl conc., which OTTAW Clicquot champagne that a similarly named group of women's clothing claim by the makers of Veuve Court level.Mitchell B. Charness, an intel- were also successful at the Federal of Montreal-area restaurants to keep using Barbie in its name and design. The court also rejected a lectual property lawyer and partner that permitted a three-outlet chain Court of Appeal subsequently Federal Court, and the Federal of Canada rd gr up o t men's cl Mattel Inc., which had been appealing a lower court decision upheld the board's decision. The owners of Les Boutiques Cliquot OnClicq ot c a Spagne t at a sm the Montreal area serving road- Juneu 2, themupremeh Courit ilarly a nameuledo againfst woy-makerothing house-style food. Barbie's Restaurant won at the cladian bP lawyers.kers of Veuve Court level.Mitchell B. Charness, an intel-the cases mean is that we have to were also successful at the Federalnever stop anyone from using their of Montreal-area restaurants tosince 1992 d the b ad's d ision keep using Barbie in its name andconsumer confusion with Mattel's lay senecteddolls. Barbie's Restaurant has grown into a three-outlet chain in he lectual property lawyer and partnernow look at how famous is the client's trademark and is there a connection or at least some possi- ble connection between the wares and services normally associated with the famous mark and whatev- "It's not enough to just be famous. That's not going to carry er the third party is doing. See Fame, page 2 www.lawtimesnews.com The Supreme Court says con- sumers won't confuse Barbie dolls for nachos and steaks served in a Quebec roadhouse restaurant with the same name. trademark," Charness says. "What that permitted a three-outlet chainthat its use of the "Barbie" name m ble co inection betwe in Federal Court, and the Federal"If our cectio i a t least some Ca —d Trademarki lawyorsmakerpposition Board f of the Canadian Impanies that hodald beenIntellectual Property Office accept- appealing a lower court decisioned Barbie's Restaurant's argument On June 2, the Supreme CourtInthe Mo rea arad erving of Ana a rul d ganst tey- O house-style od. ior Canadian IP lawyers. BY MARK BOURRIE For Law Times on the original trademark, say sen-storesd in representing companies that hold the rights to famous brands will have to prove a real connection between their marks and the prod- ucts of a company that infringes Ontario infringed on its trademark. Ottawa, says the decision does grown into a three-outlet chain in since 1992 would not likely create consumer confusion with Mattel's olls. Quarbi Bebece's and t ura 2002,n thel Trea e s-marks roanot give small businesses a free d- Res easternt hains Rideve to anyone om u uphel would notr likelye create. Tend of protection of famous marks owners of Les Boutiques Cliquotor that the famous mark holder can er the third party is doing. Court of Appeal subsequentlyark holder,nt doesn't meanet's the wares connlientns or famous trade- possi- he ous brand. "It's not enough to just be famous. That's not going to carry and services normally associated with the famous mark and whatev- OTTAWA — Trademark lawyers Opp i io dord should haveos bteen Boane o ifn e canadia Intellectual Property Office accept- ed Barbie's Restaurant's argument the media is puffery" the awyer said. not sayingIn 2002, the Trade-marks "Blursttineorgs oun Q g A top criminal lawyer, who spoke on condi- tion of anonymity, was of the same mind. quite disturbing." Ontario infrin,ged on l its trademark. "I'm there's not a place for it, but it th a Contextn that it theuover and e t rn ebecnment'sa tsheory to noulda expect t aear's more res poace for i , shtulnly h from b d e done in a co tex from any human being," he told Law Times. "I find the statement made [about the beheading] Crown p media i ment noo od ave "I w t s ying h fre not a Arif Raza of Mississauga, who represents 19- year-old stu top rmi a wyer, who spoke on tised cron of no ymity, was of the m h mind no reference to a b hea ing in the synopsi the my way of doing business at such an early junc- ture in the proceedings," says Galati, who repre- sents another of the 17 accused. Crown provided to him. the most experience in terrorism-related cases in Canada — questions tactics of this kind. prime minist r of Canada" Batas r told media on Junearye 6.-old student Saad Khalid and who has prac- fire fromy his cr of dong business at ally inents an no reference to a beheading in the synopsis the "Reading unsubstantiated allegations is not sdicatedo thar o w 17 ac u d. Buti Roc rminal aw for oer 2 year "Blurtinge outd the government'ss theory to therovided tos h puimf.fery," the lawyer said. "I'm lnsible state- but it eefnnce counsel, butn alsot that Adent c Siaadn Klh lalid and who has prac- condi- timinal a lawn for over 25 years, sayse e saw. ment not only from defence counsel, but also from any human being," he told Law Times. "I find the statement made [about the beheading] quite disturbing." "I would expect a far more responsible state- "9 a t al proceedngs" sa s Gal t, who Ttu C 25-year old restaurant worker Steven hand, intended to take politicians hostage, mur- Ca,n and blowuest the CBCi's Tronto head.- quarters asRea ing unubstaniate p lleg tions the most experience in terrorism-related cases in der them ada — q upions tactcs of this kind T " partd of a massive terrtoristd alot, isa under is not wayiminali law colleagues. such an early junc- Arife Raza of Miss,issauga,a who represents 19- sedcoi Galati l — one ovf the5 lawyesr,s s wys haithe saw that its use of the "Barbie" name mark holder, it doesn't mean it's the end of protection of famous marks or that the famous mark holder can noutr s &p Maybee fr LLPs ing their trademark," Charness says. "What the cases mean is that we have to now look at how famous is the famous brand. "If our client is a famous trade- for hush-hush." Barbie's Restaurant won at tfam client's trademark and is there a rein to hitch their business to a Photo: David W. Nees in Ridout & Maybee LLP in Ottawa, says the decision does not gin te small busi es es a f ee rein to hitch their business to a dinary allegations that call for an abnormal response," he said. "Niceties have to go out the window when the charges against the accused are drawing global media to Peel Region. "Defence counsel should not just stay silent ivhese conditions.s This isr not a case that calls 1998, is adamant that he did the right thing. "These are extraordinary times and extraor- would not create the headlines that it did." For his part, Batasar, a criminal lawyer since in these conditions. This is not a case that calls for hush-hush." dinary allegations that call for an abnormal response," he said. "Niceties have to go out the window when the charges against the accused are drawing global media to Peel Region. "Defence counsel should not just stay silent 1998, is adamant that he did the right thing. "These are extraordinary times and extraor- would not create the headlines that it did." For his part, Batasar, a criminal lawyer since Photo: Frank Gunn/CP 'These are extraordinary times and extraordinary allegations that call for an abnormal response,' says Gary Batasar, right, with lawyer Donald McLeod outside the Brampton courthouse. 'These are extraordinary times and extraordinary allegations that call for an abnormal response,' says Gary Batasar, right, with lawyer Donald McLeod outside the Brampton courthouse. media crush that followed outside the courtroom. Some well-known members of the defence bar, also speaking off the record, questioned why lous." He points out that the issue first arose in the courtroom when he asked prosecutor Jim Leising whether he had any evidence to substan- tiate the sensational allegations in the synopsis. He says he had no choice but to respond to the bsar al saysp theingedia'se treaord, q ot hie remarks and the criticism of his action are "ridicu- Bataar, so eak m off th media crush that followed outside the courtroom. Some well-known members of the defence ctmentuesfionsd why lous." He points out that the issue first arose in the courtroom when he asked prosecutor Jim Leising whether he had any evidence to substan- tiate the sensational allegations in the synopsis. He says he had no choice but to respond to the Photo: Frank Gunn/CP Batasar says the media's treatment of his remarks and the criticism of his action are "ridicu- on June 6 prhee minst G o Bnada" Batasar old But Rocco Galati — one of the lawyers with BY JULIUS MELNITZER For Law Times im tacticsi oferarfy Catasar,, the lawyer t who media revealed. Crown allegations that his client, der them, and blow up the CBC's Toronto head- quarters as part of a massive terrorist plot, is under fire from his criminal law colleagues. C 25-year old restaurant worker Steven hand, intended to take politicians hostage, mur- T BY JULIUS MELNITZER For Law Times Covering Ontario's Legal Scene he tactics of Gary Batasar, the lawyer who revealed Crown allegations that his client, Storage/Archive Litigation Support QUALITY DOCUMENT SCANNING • Scan-to-File June 12, 2006 See No, page 2 See No, page 2 See Fame, page 2 Photo: David W. Nees The Supreme Court says con- sumers won't confuse Barbie dolls for nachos and steaks served in a Quebec roadhouse restaurant with the same name. Upcoming Focus Highlights Upcoming Focus Highlights www.lawtimesnews.com March 15 - Litigation March 22 - Corporate Restructuring & Insolvency March 29 - Energy & Environmental Law April 12 April 19 April 26 May 3 May 10 - IT/Telecommunications Law - Personal Injury Law - Securities Law Informed, Intelligent Content Informed, Intelligent Content To advertise in an upcoming issue of Law Times, contact our sales team: To advertise in an upcoming issue of Law Times, contact our sales team: To advertise in an upcoming issue of Law Times, contact our sales team: Karen Lorimer 905-713-4339 klorimer@clbmedia.ca Karen Lorimer 905-713-4339 Kimberlee Pascoe 905-713-4342 Karen Lorimer 905-713-4339 Klorimer@clbmedia.ca Klorimer@clbmedia.ca Kimberlee Pascoe 905-713-4342 Kathy Liotta 905-713-4340 Visit Law Times on the web at: www.lawtimesnews.om Visit Law Times on the web at: www.lawtimesnews.om kpascoe@clbmedia.ca kpascoe@clbmedia.ca Visit Law Times on the web at: www.lawtimesnews.com Rose Noonan 905-726-5444 rnoonan@clbmedia.ca Kathy Liotta 905-713-4340 kliotta@clbmedia.ca Kathy Liotta 905-713-4340 Kimberlee Pascoe 905-713-4342 kliotta@clbmedia.ca kliotta@clbmedia.ca kpascoe@clbmedia.ca Rose Noonan 905-726-5444 rnoonan@clbmedia.ca Cross-Border Litigation Interjurisdictional Practice and Procedure Guidance on all aspects of cross-border litigation for inter-provincial, international and multiple jurisdictions Brian Casey, International Lawyer, Baker & McKenzie LLP ORDER your copy today Hardbound • 424 pp. • 2009 • $115 P/C 0291010000 ISBN 978-0-88804-484-6 • • • • • • • • • This book offers practical guidance on all aspects of cross-border litigation, covering everything from deciding where to commence litigation to enforcement of a judgment. 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MacDonald "… This will be a very useful and timely addition to the library of any litigator involved in inter- jurisdictional disputes." ... and more www.divorcemate.com Pay-Per-Use or Subscription... It's Your Choice! 1-800-653-0925 •www.docudavit.com www.divorcemate.com Pay-Per-Use or Subscription... Inside This Issue It's Your Choice! Inside This Issue Colleagues say statements to press were irresponsible 1-800-653-0925 •www.docudavit.com Batasar under fire from other lawyers Colleagues say statements to press were irresponsible Batasar under fire from other lawyers "We can cope with this case so long as the federal and provincial government respond to the strains it creates. It's too early to tell how everything will play out, but the lengthier and more complex it gets, the more important it is that we have the resources." "We can cope with this case so long as the federal and provincial government respond to the strains it creates. It's too early to tell how everything will play out, but the lengthier and more complex it gets, the more important it is that we have the resources." Quote of the week — Janet Leiper, LAO's chairwoman See Batasar, page 1 Quote of the week Trademark holders must prove real connection — Janet Leiper, LAO's chairwoman See Batasar, page 1 Trademark holders must prove real connection

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