Finance committee  Thank you. My name is H. David Rosenbloom. I am a tax attorney and a professor of tax law. My area of specialization is international, or cross-border, taxation. I am a member of Caplin and Drysdale, a U.S. law firm. I am also director of the international tax program at New York University School of Law.

Finance committee  I thank the committee for the invitation to make this presentation. My name is H. David Rosenbloom. I am private a tax attorney and a professor of tax law at New York University's School of Law. I have specialized for nearly 40 years in international or cross-border taxation. I direct the international tax program at NYU law school, and in the 1970s I was the International Tax Counsel in the United States Treasury Department.

Finance committee  It's unique in protecting the U.S. tax base from foreigners using Cyprus to invest in the United States. As I indicated later, that may not be as big a problem in Canada as it is for us, because we will generally reduce our tax down to zero, certainly on interest on royalties down to zero, and increasingly we're doing that on dividends.

Finance committee  I don't think I would endorse nothing at all. The exchange-of-information provision is useful. It has a limited utility. It's basically designed to produce information in specific cases. If a tax administration has a particular taxpayer and the information is in the treaty partner's jurisdiction, a request can be made and you can get the information.

Finance committee  I do not see that. The treaties are designed to avoid double taxation. They're basically focused on foreigners investing in Canada as opposed to Canadian companies investing abroad. I do know enough about Canadian taxation to know that you have a greater degree of connection between your treaty program and your domestic law.

Finance committee  I do.

Finance committee  Yes. The United States has automatic information exchange with many countries. In fact, that's the rule in the United States. I don't know that it is.... Automatic information exchange, as far as I understand, basically involves your turning over the information you collect to the other country on an automatic basis.

Finance committee  From my vantage point, which is of course from the United States and not Canada, I don't have much objection to any of these six agreements, frankly. The two information exchange agreements are broadly consistent with what's in the OECD. The ones with Namibia and Serbia are pretty routine, I think.

Finance committee  The treaties you're examining today basically relieve both excess taxation and, to some extent, double taxation, while protecting the Canadian tax base on inbound investment from abroad. I don't think these treaties have much to do with outbound investment from Canada. Treaties are focused on inbound investment, basically.

Finance committee  I don't think you can look to treaties as a primary tool in the fight against tax evasion, because the function of a tax treaty is basically to relieve taxation. In the United States it's a constitutional matter that you can't use a treaty to increase taxation. To look to a treaty to solve the problem, at least at the corporate level, I think is just looking in the wrong place.

Finance committee  Treaties are there to address double-taxation. That's their principal function. For me, the main reason that a treaty exists is that it establishes an international dispute-resolution mechanism to resolve cross-border disputes. Because we don't have a world tax court, we need to have some method of resolving cross-border disputes.

Finance committee  You need treaties because you don't want double taxation, but they're not going to solve the tax-haven problem.

Finance committee  I did not hear the English translation, but that's okay; I understand French.

Finance committee  Very well. I'm very happy to respond to any questions the committee may have. Thank you.

Finance committee  I can. Thank you very much.