FCA Interprets Section 95(6)(b) of the Income Tax Act (Canada)
The Federal Court of Appeal has handed down its decision in the Lehigh Cement case on the scope of the antiavoidance rule in section 95(6)(b) of the Income Tax Act (Canada). The court concluded that “s.95(6)(b) is targeted at those whose principal purpose for acquiring or disposing of shares in a non-resident corporation is to meet or fail the relevant tests for foreign affiliate, controlled foreign affiliate or related-corporation status in subdivision i of Division B of Part I of the Act with a view to avoiding, reducing or deferring Canadian tax.”
