In 2014-0528001E5, the CRA was asked to consider a situation where an existing partnership (Partnership A), having an off-calendar fiscal year end, formed a second partnership (Partnership B) indirectly through a subsidiary of Partnership A (A Co). The other…
In 2014-0532651E5, the CRA said that a non-interest-bearing loan from one Canadian corporation to another (the latter, a charitable foundation) may engage s. 69(1)(a) if the loan were not repayable on demand. In these circumstances, the CRA is of…
Canada has long had an inbound financing rule designed to ensure that Canada’s thin capitalization rules could not be circumvented through a back-to-back loan – phrased in terms of one non-resident member of a group lending funds to another person…
In 2013-0482991E5, the CRA was asked to consider a situation where a Canadian subsidiary (Canco) of a foreign parent (Parent) had lent funds to a foreign company in the group (Debtco). Canco owed Parent a like amount. Rather than…
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…