When the Canada-US tax treaty was amended by the Fifth Protocol (effective 2010), new Article IV(7)(b) was added to eliminate treaty benefits for certain hybrid entity arrangements which generated deductions in Canada but no corresponding income pick-up in the US. …
In 2014-0528021E5, the CRA usefully discussed the taxation of timber limits. Some quick observations:
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In 2014-0536331E5, the CRA ignored a technical timing problem on the liquidation of a foreign affiliate. In the CRA’s view, the deemed disposition of active business assets at fair market value under s. 88(3)(b) should not generate foreign accrual…
Distributions from a partnership in excess of a partner’s basis in its partnership interest can generate a deemed gain to the partner (s. 40(3.1)). In 2011-0417491E5 (recently released) the CRA said that technically such a gain realized by a…
In Inter-Leasing, Inc. v. Ontario (Revenue), 2014 ONCA 575, rev’g 2013 ONSC 2927, the Ontario Court of Appeal (OCA) upheld an internal group financing arrangement which eliminated provincial income tax on interest paid by Alberta-based companies (Alberta Cos) to…
In 2014-0523041C6, the CRA was asked whether a US Limited Liability Limited Partnership (LLLP) should be treated a foreign partnership, a foreign corporation, or some other type of arrangement (for Canadian tax purposes). The CRA applies a two-step process…
In C.A.E. Inc. v. Canada, 2013 FCA 92, the Federal Court of Appeal (FCA) said that the change-in-use rules in s. 13(7) and s. 45(1) should apply when property, initially held as inventory, begins to be used as depreciable property…
In McLarty v. The Queen, 2014 TCC 30, the Crown took another run at a tax-structured acquisition of seismic data, having previously lost at the Supreme Court of Canada in respect of a reassessment of the same taxpayer for…
In Henco Industries Limited v. The Queen, 2014 TCC 192, a company carried on the business of developing land for sale in Caledonia, Ontario. In 2006, certain members of local Aboriginal groups occupied the area, which made continuation of…
In Tsilhqot’in Nation v. British Columbia, 2014 SCC 44, the Supreme Court of Canada reaffirmed that the doctrine of terra nullius – no one owned the land prior to European assertion of sovereignty – never applied in Canada: the…