In 2012-0460121E5, the CRA was asked to consider a case where under the foreign tax law a foreign affiliate (FA) ceases to be required to compute its net income for foreign tax purposes. Rather, going forward, the foreign tax…
This week British Columbia announced increased corporate and personal taxes as part of its 2013 budget. The general corporate income tax rate will be increased to 11% from the current 10% (26% combined federal and provincial rate), effective April 1,…
There’s been a lot in the news recently about appropriate responses to tax avoidance schemes. The OECD has just released a report on tax base erosion and profit shifting (February, 2013) which was endorsed by the G-20 Finance Ministers in…
We have reported previously on the audit initiatives of the Canada Revenue Agency (CRA) with respect to Tax-Free Savings Accounts (TFSAs) (http://www.thor.ca/tax-alerts/punitive-tfsa-audits/ and http://thor.ca/blog/2012/11/cra-begins-issuing-tax-free-savings-account-tfsa-reassessments/). Recent discussions and correspondence with the CRA suggest a significant expansion of those audit activities.…
In 2011-0427101C6 (released this week), the CRA was asked whether a creditor’s acquisition of an interest in a debtor-partnership could qualify as a “seizure” of the debtor-partnership’s property for purposes of s. 79.1. Section 79.1 contains rules (often favorable)…
In 2012-0432861E5, the CRA was asked whether a general partner would be required to obtain a clearance certificate under s. 159 on the liquidation of a limited partnership. Further, if such a certificate were required, would it need to…
In 2012-0441091E5, the CRA said that fees paid to a non-resident for the use of custom software in Canada were exempt from Canadian withholding tax. The situation involved a non-resident company (NR Co) that designs and develops computer software…
In my January 8, 2013 post (“My Name is Cliff, Drop Over Some Time”), I criticized parliamentarians for passing most tax legislation without much, if anything, in the way of informed debate. As a consequence, there is a lot of…
Imagine that you run a successful business and report a net income of tens of thousands on revenues of several hundred thousand dollars a year. You hire a respected accounting firm to prepare your financial statements and tax returns each…
The matter of fictions in our Tax Act was on my mind this week. Second Life has nothing on the Income Tax Act when it comes to creating a virtual reality. I’m thinking of the various tax rules that deem…