Tax guy to the rescue – Legal Report: Tax Law
Written by Jennifer Brown – January 5, 2015
Who would have thought tax lawyers would be the new superhero in today’s legal landscape, but increasingly they are, often swooping in to save clients from judgment in the global court of public opinion as well as saving them money. Many say one of the reasons tax lawyers have been propelled to centre stage is because there is so much tax competitiveness between countries today. Everybody wants a bigger share of the pie and the question is who should get to grab it first?
“The tax practice traditionally was one where the tax lawyers would work in tandem with the corporate partners but it was the corporate lawyers who had all the swagger and the tax lawyers were the geeks doing all of the paper work. But tax litigation has become a huge part of the business now,” says Al Meghji a partner in the 64-lawyer tax practice at Osler Hoskin & Harcourt LLP.
Meghji led the team that successfully represented GlaxoSmithKline two years ago at the Supreme Court of Canada in Canada v. GlaxoSmithKline Inc. — a monster transfer pricing battle between the pharmaceutical giant and the Canada Revenue Agency. Transfer pricing is the biggest area of tax litigation right now, says Meghji and modern tax litigation cases like Glaxo are high stakes. “There are all of these massive transfer pricing cases, massive GAAR [General Anti-Avoidance Rule] cases and the stakes are enormous. The general counsel and the CFOs take a direct interest because it can have very significant consequences for the financial well being of these companies. The size of the disputes and what’s at stake has dramatically grown.”
In the last three to five years, there has been a moral dimension injected into the dialogue about corporate tax — accusations of abusive tax avoidance can be kryptonite to a company’s brand. “Imagine you are a senior officer of a big corporation — you have to make judgment calls on what is acceptable tax avoidance and what is abusive tax avoidance. Nobody quarrels that tax avoidance is fine; you are allowed to engage in tax avoidance, but there is the idea that some of it is unacceptable,” says Meghji.
Al Meghji is described as the Wayne Gretzky of tax litigators in Canada. He is a Harvard-trained partner at Osler Hoskin Harcourt in Toronto and Calgary. He has argued and won most of Canada’s most important tax avoidance cases. In 2014 he was named one of the World’s Leading Business Lawyers, and in 2015 he was named Toronto Tax’s “Lawyer of the Year”.
BENGER: What’s your general opening statement about tax avoidance?
MEGHJI: Tax avoidance has become the subject of a lot of public discussion because of what’s been going on recently with some of the, some of the companies like Starbucks and Google. And it’s become a subject of discussion in forums that didn’t typically discuss this.
We didn’t used to talk about tax avoidance in the daily media but there is this public interest in whether corporations are paying, quote-unquote, their fair share of taxes. And there are those who feel they’re not and they’re taking steps to avoid paying their fair share of taxes.
And so it’s become the subject of public discourse like never before. And I think in the course of these discussions there’s a lot of misunderstanding, there’s some exaggeration, there is hyperbole, and I think there’s more passion than reason.
And I think we need to go back to talking about what tax avoidance is, why it happens, what’s acceptable tax avoidance, what’s abusive tax avoidance, what can legislatures and courts do about it and we need to get back to a more reasoned discussion about the subject
via Canadian Lawyer
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