!Jurisdiction Archives - Page 10 of 18 - TaxEd International

Category Archives: !Jurisdiction

Cameco Corporation Wins Monumental Sham / Transfer Pricing Tax Case

October 2, 2018 Jenny P. Mboutsiadis

mine-462318_1920

The Tax Court of Canada has ruled in favour of Cameco in its massive tax dispute with the Minister of National Revenue. The Court held that the Minister was wrong to include $483.4 million earned by Cameco’s Swiss subsidiary in the mining giant’s income for its 2003, 2005, and 2006 taxation years and ordered the amounts be reversed out. Also, approximately $98 million and $183.9 million were added back in computing Cameco’s resource profits for its 2005 and 2006 taxation years, respectively.

Had the Court upheld the reassessments, Cameco would have been liable for $11 million in taxes, plus interest and penalties, for those years. Further, subsequent taxation years with the same issues would have resulted in Cameco being liable for a staggering $2 billion in taxes, plus interest and penalties.

Canada

Canada Without Poverty v. Attorney General of Canada

August 11, 2018 Nicolas Simard

On July 16, 2018, the Ontario Superior Court of Justice delivered a major victory to Canadian charities that devote all or a portion of their resources to non-partisan political activities.

In Canada Without Poverty v. Attorney General of Canada, the Court held that non-partisan political activities constitute charitable activities for the purposes of the Income Tax Act (Canada) (the Act), provided that they are carried out in furtherance of an organization’s charitable purposes. Accordingly, a registered charity may devote significantly more than 10% of its resources to such activities, contrary to long-standing Canada Revenue Agency (CRA) policy.

This decision is of particular interest to registered charities that have been the object of increased audit activity from the CRA for having engaged in political activities. Depending on the specific circumstances at issue, the decision may forge a path to a successful outcome for those involved in administrative audits with the CRA or legal proceedings before the courts.

Analysis, Canada, Français, Quebec

Rapport annuel du Bureau de la protection des droits de la clientèle de Revenu Québec: il reste encore beaucoup à faire!

July 17, 2018 Nicolas Simard

Depuis plusieurs années, de nombreuses pratiques de Revenu Québec (« RQ ») ont été dénoncées par le public, les médias et différents organismes. Ceci a contribué à la perte de confiance du public envers l’agence gouvernementale.

Dans son rapport annuel 2014-2015, le Protecteur du citoyen déplorait le comportement de RQ auprès des contribuables et soulignait, en résumé :

la judiciarisation inutile des désaccords ;
l’application de positions rigides malgré les décisions contradictoires des tribunaux ;
les méthodes de vérification inadéquates et abusives ;
l’émission d’avis de cotisation erronés basés sur des présomptions inadéquates;
le refus de RQ de considérer les explications de certains contribuables.

Analysis, Canada, Cross-border (Canada/US)

Le processus d’adoption de l’IM est enclenché

July 13, 2018 Alain Ranger

Alain Ranger pratique depuis plus de 30 ans en droit fiscal, plus spécialement en droit fiscal lié au droit des sociétés et au droit des affaires. Au cours des années, Alain a développé une expertise reconnue dans une variété de domaines dont les fusions et acquisitions, les transactions transfrontalières, les réorganisations d’entreprises, les investissements étrangers, les financements structurés et la fiscalité des sociétés. Le 28 mai dernier, le ministre des Finances du Canada a déposé à la Chambre des communes un avis de motion de voies et moyens (l’« Avis ») officialisant ainsi l’intention du Canada de présenter un projet de loi pour mettre en oeuvre les propositions retenues de la Convention multilatérale pour la mise en œuvre des mesures relatives aux conventions fiscales pour prévenir l’érosion de la base d’imposition et le transfert de bénéfices (l’« IM »). L’Avis a été adopté par les parlementaires le 21 juin et le projet de loi a ainsi franchi l’étape de la première lecture à la Chambre des communes.

Pour fins de rappel, le Canada était l’un des signataires de l’IM le 7 juin 2017 et il avait alors annoncé son intention d’adopter les normes minimales proposées par l’OCDE dans le cadre des propositions BEPS ainsi que l’arbitrage obligatoire lié aux différends dans les conventions fiscales. L’Avis prévoit donc l’adoption de ces normes minimales, ainsi que d’autres mesures à l’égard desquelles le Canada avait initialement réservé sa position.

Analysis, Canada

Canada Life: The Denial of Rescission is a Troubling Decision for Taxpayers and Professional Advisors

July 12, 2018 Alan Schwartz

On June 21, 2018, the Ontario Court of Appeal handed down a decision in the case of Canada Life Insurance Company of Canada v. the Attorney General of Canada and Her Majesty the Queen in the Right of Ontario. This is a very troubling decision for taxpayers and their professional advisors. The facts are briefly as follows. The Canada Life Insurance Company of Canada (“CLICC”) and certain of its affiliates carried out a series of transactions and events in December 2007. The purpose of the transactions was to realize a tax loss to offset unrealized foreign exchange gains accrued in the same taxation year. The Canada Revenue Agency (the “CRA”) disallowed the claimed loss in the reassessment of CLICC’s taxes for 2007. Asserting that it had proceeded on the basis of erroneous advice from its tax advisor, CLICC applied to the courts for an order setting aside the transactions and replacing them with other steps retroactive to the date of the original transaction.

The problem arose because the tax loss was to be triggered by the winding up of a limited partnership. The mistake was that the general partner of the limited partnership, CLICC GP, was also wound up at the same time that the partnership was wound up. This resulted in the limited partner, CLICC, carrying on the business of the limited partnership alone within three months of the dissolution of the partnership.

CLICC originally applied for an order rectifying the transaction so as to move the winding-up of the general partnership from December 31, 2007 to April 30, 2008. The taxpayer was successful in its application before the application judge. However, the Attorney General appealed the decision. While the appeal was pending, the Supreme Court of Canada, in the case of the Fairmont Hotels,[1] overruled previous decisions which permitted rectification. The change in law restricted the scope of the equitable remedy of rectification to the correction of written agreements. Continue reading »