Tax Law Blog Project (“TLBP”) – Entry #2

February 27th, 2014 by

Earlier this month Facebook marked its 10th anniversary.  If you haven’t already, you should head over to FB and read Mark Zuckerberg’s speech:  After all, few people will achieve what Mr. Zuckerberg has managed to with FB, which is to say nothing of the fact that he managed to achieve it by age 30… William Hsu ( aptly referred to him as the Beethoven of technology and I would have to agree.

Taxblog2You may be asking yourself, however, what prey tell does FB’s 10th anniversary have to do with Canadian tax?  Quite a bit, actually.

You see, FB and Microsoft, which also made headlines this week because Bill Gates stepped down as chairman and it named a new CEO, are not only tech giants, they are among the world’s largest companies.  And because they are technology companies, they are less sensitive to geography than the world’s largest companies were even ten years ago.  Tax, on the other hand, has always been and continues to be entirely dependent on geography, or more specifically, residency.  In other words, the entire global tax infrastructure as we know it is predicated on an assumption of the world’s largest businesses which may be outdated.  I recognize, of course, that this observation is a gross over simplification of the issues and challenges presented by our ever increasingly global economy.  Still, it’s important to think about how Canadian or any country’s tax authorities for that matter stay “friends” with today’s largest companies.  See what I did there?

That’s the tax perspective, see you next week.

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