{"id":506,"date":"2013-03-11T15:25:17","date_gmt":"2013-03-11T15:25:17","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=506"},"modified":"2025-02-12T13:29:33","modified_gmt":"2025-02-12T21:29:33","slug":"cra-confirms-position-on-foreign-amalgamations","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2013\/03\/cra-confirms-position-on-foreign-amalgamations\/","title":{"rendered":"CRA confirms position on foreign amalgamations"},"content":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2013\/03\/2012-0457741E5.pdf\">2012-0457741E5<\/a>, the CRA confirmed that Canadian withholding and reporting obligations can potentially arise when two foreign corporations, holding taxable Canadian property, cease to exist in the course of a foreign amalgamation.  In broad terms, a withholding and reporting obligation can arise in Canada under s. 116 where a non-resident \u201cdisposes of\u201d taxable Canadian property (TCP), which generally includes Canadian real estate or resource property (or shares of a company that owns such property).  Where two foreign corporations that own TCP amalgamate, the CRA will examine whether under the applicable foreign corporate law the amalgamating corporations legally cease to exist.  In this latter event, the amalgamating corporations are considered to have \u201cdisposed of\u201d their TCP \u2013 triggering the s. 116 obligations.  Alternatively, the foreign corporate law may be similar to Canadian domestic law, where the amalgamating corporations legally \u201ccontinue as one corporation\u201d.  In this event, the amalgamating corporations are considered <u>not<\/u> to have disposed of any property.  In <em>Black &amp; Decker Manufacturing Co.<\/em> [1975] 1 S.C.R. 411, the Supreme Court of Canada said that in a Canadian amalgamation \u201c\u2026the amalgamating companies continue without subtraction in the amalgamated company, with all their strengths and their weaknesses, their perfections and imperfections, and their sins, if sinners they be\u201d.  The full implications of this \u201ccontinuation principle\u201d from a Canadian tax perspective will be examined shortly by the Supreme Court of Canada in <em>Envision Credit Union v. The Queen<\/em>, which is scheduled to be heard on March 19, 2013.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2013\/03\/2012-0457741E5.pdf\">2012-0457741E5<\/a>, the CRA confirmed that Canadian withholding and reporting obligations can potentially arise when two foreign corporations, holding taxable Canadian property, cease to exist in the course of a foreign amalgamation.  In broad terms, a withholding and reporting&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-506","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/506","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=506"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/506\/revisions"}],"predecessor-version":[{"id":2799,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/506\/revisions\/2799"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}