In The Queen v. Global Equity Fund Ltd., the Federal Court of Appeal (FCA) applied Canada’s general anti-avoidance rule (GAAR) to deny a business loss on the basis that it had no “air of economic or business reality”. The…
Among the many provisions in the October 24, 2012 pending amendments (see http://www.fin.gc.ca/drleg-apl/nwmm-amvm-1012-eng.asp) are rules that clarify the tax treatment of simple pro rata distributions from a foreign affiliate. Although the default rule is that all such distributions are…
On October 24, 2012, the CRA released a technical interpretation which confirmed that no withholding tax applied on commission fees paid to a US insurance broker for certain customer information (2012-0457951E5). Briefly, the facts involved a Canadian insurance broker (Canco)…
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…