Category: Corporate Tax

On October 24, 2012, Finance released a huge package of technical amendments, many of which have been outstanding for years (see http://www.fin.gc.ca/n12/12-129-eng.asp). The package also included a revised set of rules pertaining to “upstream loans” made by foreign affiliates…

During the week of October 22, 2012, the Tax Court of Canada (TCC) found that Canada’s general anti-avoidance rule (GAAR) did not apply because all the transaction-steps were undertaken primarily for a non-tax purpose (Spruce Credit Union v. The Queen,…

Transfer pricing issues arise when entities of a multinational corporation resident in different jurisdictions transfer property or provide services to one another.  During the week of October 15, 2012, the Supreme Court of Canada decided that any transfer pricing reassessment…

During the week of October 15, 2012, the Federal Court of Appeal (FCA) applied Canada’s general anti-avoidance rule (GAAR) to deny a capital loss that was “a loss on paper only in the sense that no economic loss was suffered”…

In its October 15, 2012 release of updated draft legislation (at http://www.fin.gc.ca/drleg-apl/bia-leb-1012-eng.asp), Finance eliminated the benefit of the new outbound financing rule for Canadian subsidiaries of foreign multinational corporations if a treaty applies to reduce the Canadian company’s interest…

In correspondence released October 10, 2012 (2012-0455781E5), the CRA said it has the power to reassess a dissolved Ontario company.  This stems from s. 242(1)(b) of the Business Corporations Act (Ontario), which provides that a civil, criminal, or administrative action…

One of the simplest business structures involves one party (typically a company) holding legal title for and on behalf of the true beneficial owner (in a group).  This can be done for various reasons, both tax and non-tax related.  The…

On Wednesday, the Canada Revenue Agency (CRA) released correspondence (2012-0436921I7) between Headquarters and a Large File Case Manager in a local office (TSO).  Under audit was a Canadian parent company (Canco), which had invested in USD preferred shares of a…

On September 13, 2012, the Joint Committee (of the CBA and CICA) submitted a host of technical concerns with the proposed new rules relating to “foreign affiliate dumping”.  Broadly, these new rules target any investments in a foreign affiliate made…

In 2011-0416181E5 (released on Wednesday), the CRA considered a US company (US Co) that offered to Canadian companies (Cancos) the ability to advertise on US Co’s website.  The CRA concluded that payments by the Cancos were for advertising