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 [...]

Do non-resident corporations carrying on business in Canada have to pay a penalty for failing to file an income tax return on time, even though no tax is owed? This question was answered in the affirmative by the Tax Court of Canada (pursuant to s. 162(2.1) of the Federal Income Tax Act, R.S.C. 1985, c. [...]

On March 9th, 2010, the Ontario Court of Appeal released its decision in Danso-Coffey v. Ontario, 2010 ONCA 171. The case deals with an individual who is named a director of a corporation without her consent or knowledge. Danso-Coffey was owned and incorporated by Ms. Danso-Coffey’s brother. Without her knowledge, she was named one of [...]

Earlier this month, the Federal Court of Appeal released its decision in Canada v. J. Hudon Enterprises Ltd., 2010 FCA 37, a case that asks whether, in the context of horse racing, the proportion of prize money awarded to drivers and trainers after a successful performance at the track is subject to GST. Race tracks [...]

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. [...]

On December 4th, the Tax Court of Canada released its decision in GE Capital v. The Queen 2009 TCC 563, dealing with transfer price deductions. GE Capital was anticipated as a major decision relating to transfer pricing and inter-company financial transactions. Consequently, the court conducted a thorough analysis of the different transfer pricing methodologies and [...]

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 [...]

Offshore trusts have become an essential element of successful tax planning. Trusts are used as tax planning vehicles as they are considered a separate legal entity from the individual. Thus, the income and assets of the trust are excluded from the individual’s estate for tax purposes. A previously successful, but now uncertain, strategy had used [...]

Imagine the following scenario: Bob owns a house in a town in Quebec. In 2020, Quebec passes legislation to the effect that no municipality may increase property taxes by more than 10% each year. In 2022, citing the need for higher revenues to account for an increase in police services due to rising crime, the [...]