In Landbouwbedrijf Backx BV v Canada, 2019 FCA 310, the Court agreed that a Dutch company was resident in Canada because the central mind and management of the company was in Canada. The Court found the following facts to be…
SCC on judicial review
Gergely Hegedus, “SCC on Standards of Judicial Review” (February 2020) 10:1 Canadian Tax Focus, draws the following lessons from Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, Bell Canada v Canada (Attorney General), 2019 SCC 66, and…
Commission employees
The trend in Tax Court jurisprudence is to require specificity in contracts to permit a commissioned employee to deduct an expense. The contract must contemplate the particular expense in question before it will be deductible under paragraph 8(1)(f) of the…
ABIL denied
In Moose Factory Restaurant Properties Ltd. v R, 2019 TCC 156, the taxpayer claimed an ABIL in respect of a debt of a third party that the taxpayer had guaranteed. The third party went bankrupt leaving the taxpayer exposed under…
The Tax Court and the implied undertaking rule
In Silver Wheaton Corp. v R, 2019 TCC 170, the Court held that the implied undertaking rule prevented third parties from obtaining the production of documents and information produced by the taxpayer in a Tax Court appeal. Bhuvana Sankaranarayanan, “Third…
Foreign tax credits and US estate taxes
US federal and state estate taxes are eligible for a tax credit in Canada only because of the Canada-United State Income Tax Convention (1980). The treaty, however, does not bind Canada’s provinces. Ontario and BC, unlike other provinces, have not…
Payroll deductions are special
How are payroll source deductions different from an ordinary income tax debt? 1. The CRA can commence collection action as soon as source deduction are overdue. An objection does not stay collection action. 2. Some limitation periods (assuming no negligent…
SBD grind avoided
Suppose that Holdco owns all of the shares of both Realco and Opco. All three corporations have the same year-end. In year 1, Realco sells real property and realizes a large gain that generates passive income in excess of $150,000.…
Avoiding late-filing penalties
The Court in Chen v Canada (Attorney General), 2019 FC 1435, seemed to accept that a taxpayer, to avoid late-filing penalties, could have filed a T1135 with estimates in it before the deadline and then filed an amended return later.…
Non-arm’s length interest
The shareholders of Opco loaned it money to permit it to acquire inventory. The loans were unsecured and bore interest at 10% yearly. The Court of Quebec, in light of the Quebec equivalent of section 67 of the ITA, denied…