US tax reform is now fully bedded in, and, with a greater understanding of its effects on corporate transactions, we expect that the market will remain hot for mergers and acquisitions. We don’t expect fears of a slowdown to make much of a dent in M&A activity in 2020, although there is a possibility of transactional activity slowing in the immediate run-up to a potentially consequential US election.
We expect Canada to be a major destination for inbound investment in 2020 and the demand for local legal expertise will be high in a market dominated by a small number of local players.
The expense and complexity of the US immigration regime will continue to encourage local-to-local hires, and we expect companies to continue to struggle to find tax managers with sufficient experience for high-level roles shepherding corporate transactions.
In this ‘hot’ business environment, and with very tight labour markets across the USA and Canada, the need for experienced, capable assistance in finding the right people is greater than ever – Mason Rak is embedded in these markets and we stand ready to help you in your search.
We anticipate continued digitisation and the explosion of direct-to-consumer sales, with formerly distributor-focused companies such as Goodyear now selling directly to consumers. We think this will eventually make it critical for companies of many kinds to upskill in indirect and tax technology areas even if these do not immediately seem relevant to their business models.
The Wayfair ruling, issued in June 2018, has compounded this in the United States; in 2020 states and territories will continue grabbing cash by legislating for economic nexus and introducing marketplace rules. Similarly, the Quebec Sales Tax in Canada continues to diverge from national sales tax.
Companies will need to think carefully about whether they are operating any kind of marketplace, as well as staying informed about rates and exemptions in North America’s hundreds of taxing jurisdictions. Judicious use of technology is once again the answer.
With our deep knowledge and experience of the US and Canadian corporate tax markets, let Mason Rak be your partner in facing the tax challenges and opportunities of 2020.