When deciding cases relating to tax planning—or the minimization of a taxpayer’s tax burden—judges face the daunting task of reconciling a tension between longstanding common law principles and s.245 of the Income Tax Act, R.S.C., 1985, c.1,  the General Anti-Avoidance Rule (GAAR). On the one hand, Lord Tomlin’s holding in Duke of Westminster that “every [...]

The SCC is currently considering the very modern problem of Alexandre Dubé’s capital gains tax woes. As a member of the Obejiwan First Nation (as defined by the Indian Act R.S.C. 1985, c.I-5), living on a reserve in Quebec, many of Mr. Dubé’s sources of income are exempt from federal and provincial taxation schemes. He [...]

Last month, the Federal Court of Appeal, in Antle v. Canada, 2010 FCA 280 [Antle 2010], upheld the Tax Court of Canada decision in Antle v. The Queen, 2009 TCC 465 [Antle 2009], finding that an offshore spousal trust was not valid. Both courts agreed that the primary purpose of the spousal trust was to [...]

As many readers are likely aware, the Minister of National Revenue (the “Minister”) has very significant tax collection powers and employs them often. A quick look at the more recent convictions in the province of Ontario makes that clear. In fact, under certain circumstances, the Minister has the power to garnish a person’s paycheque or [...]

In recent weeks, the Federal Court of Appeal has sent two cases back to the Tax Court of Canada for rehearing. In GlaxoSmithKline Inc. v. The Queen, 2010 FCA 201 (discussed here), the Court of Appeal found that Rip C.J. erred by misunderstanding the application s. 69(2) of the Federal Income Tax Act, R.S.C. 1985, [...]

In simple terms, when related corporations trade property, services or intangibles across international borders, the outlay is referred to as the transfer price. Pursuant to s. 69(2) of the Federal Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (“ITA”), the transfer price must be “reasonable in the circumstances” that would exist if the non-resident [...]

Last month, the Federal Court of Appeal released its judgment in Lehigh Cement Limited v. Canada, 2010 FCA 124. This is the latest decision from the Court of Appeal dealing with the application of the General Anti-Avoidance Rule (“GAAR”) within the Federal Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (“ITA”). The appeal court [...]

With the expiration of the personal income tax filing deadline, it is fitting to mark the occasion by discussing the SCC’s recent decision in Montreal (City) v. Montreal Port Authority, 2010 SCC 14, regarding Crown corporation payments in lieu of taxes (PILT) to municipalities. At issue in this case was the scope of two Crown [...]

A fundamental tenet of Canadian tax law, as stated in Commissioners of Inland Revenue v. Duke of Westminster, [1936] A.C. 1 (H.L.), is that a taxpayer is entitled to make any lawful arrangement that he or she sees fit in order to reduce his or her liability to tax. The General Anti-Avoidance Rule (“GAAR”), at s. [...]

The only surprising thing about the recent Supreme Court of Canada decision in Quebec (Revenue) v. Caisse populaire Desjardins de Montmagny, 2009 SCC 49, is that the Quebec Superior Court at first instance found in favour of the Crown in all three cases from which the appeals arose. The issue in C.P. Desjardins de Montmagny [...]