Description: Loblaws, a major Canadian grocer, was hit with a massive $368 million tax bill in a case held before the Tax Court of Canada. The case was not directed against the grocery business, but rather at a Bahamian banking subsidiary of the grocery chain. Although Loblaws intends to appeal the decision, officials announced that they would record the costs of the major tax hit in the third quarter financial statements.
Date: September 10, 2018
1) What did you learn about tax strategy from reading this article?
2) If you are looking ahead to a career as an accountant, have you given any thought to specializing in tax planning?
3) In the article it notes that Loblaws will be able to pay the tax bill out of its own cash reserves. It will not have to borrow the money or change its dividend policy. Which chapter in Wiley’s Financial Accounting: Tools for Business Decision Making, would teach you something about dividend policy?