{"id":1271,"date":"2014-09-29T16:10:54","date_gmt":"2014-09-29T16:10:54","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=1271"},"modified":"2014-09-29T16:10:54","modified_gmt":"2014-09-29T16:10:54","slug":"cra-confirms-assignment-of-debt-does-not-constitute-repayment","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2014\/09\/cra-confirms-assignment-of-debt-does-not-constitute-repayment\/","title":{"rendered":"CRA confirms assignment of debt does not constitute repayment"},"content":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2014\/09\/2013-0482991E5.pdf\">2013-0482991E5<\/a>, 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 Debtco repaying Canco and Canco repaying Parent, Canco simply assigned to Parent the debt owed by Debtco.  The CRA confirmed its view that this assignment would not constitute \u201crepayment\u201d of the debt by Debtco for purposes of s. 15(2.6).  Accordingly, if the debt remained owing by Debtco for more than one year after the end of the taxation year of Canco in which the loan was made, the loan would be deemed to be a dividend paid by Canco under s. 15(2) and s. 214(3)(a) \u2013 triggering Canadian withholding tax (see page 4).  Furthermore, if the loan owed by Debtco were instead \u201cnovated\u201d to avoid this withholding tax, the CRA would consider applying the general anti-avoidance rule in s. 245 (see page 5). <\/p>\n","protected":false},"excerpt":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2014\/09\/2013-0482991E5.pdf\">2013-0482991E5<\/a>, 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&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1271","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=1271"}],"version-history":[{"count":0,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1271\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=1271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=1271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=1271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}