Going Global: Some Foreign Tax Fundamentals for the Expanding Technology Enterprise

• Author: Christopher Grasset
• Pages: 457-469

457

Chapter 18

Going Global: Some Foreign Tax

Fundamentals for the Expanding

Technology Enterprise

christopher grasset

A. INTRODUCTION

By some accounts, the entire market for technology in Canada is about the

size of that in Texas; in a bad year, maybe Ohio. While that may not be an

entirely accurate assessment, it is fair to say that a Canadian technology

enterprise with a desire to grow must expand into foreign markets very

quickly and, generally, at a much greater pace than its American, European,

or even Asian counterparts. Those players have very substantia l domestic

markets within which to develop before crossing their borders. Early-stage

Canadian entrepreneurs, on the other hand, will often f‌ind themselves sell-

ing into world ma rkets well ahead of their perceived need or capacity to

engage in any level of international business planning.

Experience shows that many early-stage Canadian enterprises suffer un-

pleasant and exp ensive surprises, ranging from unexpec ted expenses and

cash-f‌low reduct ions to lost tax avoidance opportunities, because they do

not have an even rudimentary understanding of the international business

regulation and taxation systems within which they are caught up so quickly.

Some struggle through and become notable successes. Too many others do

not, to the great detriment of the Canadian economy.

As a result, it is incumbent on the professional advisor to attempt to

raise the level of awareness regarding some of these major pitfalls (and op-

portunities) so as to arm the entrepreneurial client with some basic, ana-

lytical business tools t hat can increase his or her odds of success. For their