Key Takeaways In recent reversals, the FCA has moved beyond individual provisions to assess how the broader tax regime is meant to function. Predictability now depends less on technical wording and mo...
Key Takeaways Subsection 165(1.11) of the Income Tax Act requires a large corporation to specify in its Notice of Objection the issues, relevant facts, and relief sought. Bakorp Management Ltd. framed...
Key Takeaways The appeal failed because the parties continued after the win path had closed. The hearing created no real opportunity or upside. The case continued without a clear stop-point, turning t...
Keybrand Foods Inc. v. HMQ, shows how interest-deductibility disputes, and others like them, are shaped after reassessment as the objection record crystallizes the explanation of the business situatio...
Key Takeaways CRA recharacterization does not apply where arm’s length pricing remains available. Courts distinguish pricing disputes from disputes over transaction structure. The objection record set...
Key Takeaways The Tax Court’s mandate allows the DOJ and CRA to introduce new alternative theories late in litigation, which can increase cost, delay the litigation timeline, and introduce litigation ...
Key Takeaways Loss consolidation transactions attract CRA scrutiny even when they align with Parliament’s design. The mechanical structure rarely drives the dispute – the interpretive record does. Bus...
Key Takeaways Penn Ventilator v. HMQ shows how disputes evolve when a transaction supports two viable case theories: one tied to the structure, the other to the business’s economic behaviour. Courts r...
Key Takeaways The mechanics worked, but the Court focused on whether the reorganization produced a real economic loss or merely a paper one. That distinction shaped the GAAR outcome. The decisive batt...
Key Takeaways Inconsistent cross-border descriptions created tension between the structure’s design and its economic reality. Risk and benefit flowed to different entities across jurisdictions, shapin...
Key Takeaways Enhanced costs continue to rise. The Tax Court again imposed enhanced costs on the Crown, reinforcing a pattern: disciplined conduct in the right arena creates financial consequences tha...
Key Takeaways CRA challenges often evolve from mechanical to interpretive tests. The decisive factor is not a structure’s mechanics but whether its interpretive elements hold up under scrutiny. Meetin...
Key Takeaways The Tax Court confirmed that foreign tax interest is not deductible — BMO lost on the law. The result was predictable, but BMO's strategy maximized potential upside while containing the ...
Key Takeaways Benefit without cost invites scrutiny: Courts scrutinize tax structures that offer benefit without tradeoff, and when they find this gap, they side with the CRA and uphold the reassessme...
Two decades later, the CRA continues to test the link between borrowing and income in financing structures, often under s. 20(1)(c)(i). The logic in Ludco still governs how those challenges are read. ...
Key Takeaways No inference of intent: Courts rejected the claim that surplus cash was earmarked for decommissioning in the absence of contemporaneous reserves, allocations, or disclosures. Rational co...
Key Takeaways Forum defines outcomes: The taxpayer’s appeal was quashed without the merits ever being heard because the chosen forum lacked jurisdiction. Procedure equals substance: Courts enforce jur...
Key Takeaways Framing gap: The Tax Court accepted CRA’s framing because Vortex’s reply lacked engineering support and legal positioning. In other disputes, when claims were framed with qualified techn...
Key Takeaways Premium payments as benefits: When one company pays premiums on a policy owned by another, courts treat it as a taxable benefit — intent does not override structure. Expanding reach of s...
Key Challenge: Clarifying GST/HST Supply Classification Integrated Transactions: Tax professionals should proactively evaluate whether elements of a purchase are truly independent or part of a single ...
Key Takeaways from Azmayesh-Fard v HMK Enforcement is accelerating. CRA’s access to global financial data has fundamentally changed how offshore holdings are detected. Risk is dynamic. Proactive tax d...
The Federal Court of Appeal’s (“FCA”) decision in Enns v. Canada[1] clarifies how “spouse” is defined for purposes of paragraph 160(1)(a) of the Income Tax Act (“ITA”). This decision carries significa...
Coopers Park (2024 TCC 122) shows CRA intensifying its push to access accountant communications in tax disputes. The risk rises when legal and accounting teams blend, and it remains invisible until th...
The Federal Court of Canada’s decision in Onex Corporation v. Canada (Attorney General)[1] highlights a meaningful development for taxpayers challenging the Agency’s discretionary decisions. The FC’s ...
Recent Supreme Court of Canada (SCC) rulings provide critical guidance on tax dispute jurisdiction, shaping how tax reassessments and ministerial decisions should be challenged.
Executive Summary: The Tax Court drew a hard line: choosing non-CCPC status before a sale is not abuse, at least until Parliament closed the door in 2022.
Key Takeaways Economic substance framed: The FCA upheld a constrained structure because it was positioned around real economic gains, not technical form. Whole-plan control: GAAR outcomes often hinge ...
Executive Summary A recent ruling by the Federal Court of Appeal in Gestion M.-A. Roy Inc. v Canada, 2024 CAF 16, underscores a growing risk in corporate tax planning: life insurance premiums paid by ...
In Glencore Canada Corporation v. His Majesty the King[1] (“Glencore FCA”), the Federal Court of Appeal examined and ultimately rejected Glencore’s contention regarding the tax treatment of commitment...
The Tax Court of Canada’s recent ruling in Fiera Foods Company v. HMK1 has significant implications for businesses claiming Input Tax Credits (ITCs) under the Excise Tax Act (ETA).
Section 111 of the Income Tax Act (“ITA”) allows taxpayers to carry losses back and forward to offset income in different taxation years. However, subsection 111(5) restricts non-capital loss carryove...
Key Points in Glencore The case involves an appeal against a reassessment under the Income Tax Act, where the Minister of National Revenue assessed as income certain fees Falconbridge received due to ...
Management M.-A. Roy Inc. v. HMK (“Gestion Roy”) centers around whether an Opco’s decision to pay insurance premiums, with two Holdcos as the policy owners, gives rise to a shareholder benefit under s...
Thompson Reuters considers the authors “leading tax experts and litigators”. The authors agreed to grant TR partial rights to this work. This article first appeared in TR’s Tax Dispute and Resolution ...
Executive Summary Eastmain believed its CEO’s salary qualified as a “Canadian Exploration and Development Overhead Expenses” and deducted the same. Revenu Québec (“RQ”) denied Eastmain’s 2007 to 2010 ...
*Thompson Reuters considers the authors “leading tax experts and litigators”. The authors agreed to grant TR partial rights to this work. This article first appeared in TR’s Tax Dispute and Resolution...
When a CRA auditor thinks the CRA can take a bigger share of your capital, other CRA agents and the CRA’s lawyers will fight to extract it.
*Thompson Reuters considers the authors “leading tax experts and litigators”. The authors agreed to grant TR partial rights to this work. This article first appeared in TR's, Tax Dispute and Resolutio...
The Supreme Court of Canada, in Canada (Attorney General) v. Collins Family Trust,1 further clarifies when courts can grant equitable remedies of rectification or rescission.
*Thompson Reuters considers the authors “leading tax experts and litigators”. The authors agreed to grant TR partial rights to this work. This article first appeared in TR’s, Practical Insights in May...
Key Takeaways Legal framing decisive: The CRA’s misinterpretation of treaty and domestic provisions collapsed on appeal, shifting control of the dispute to the taxpayer. Facts aren’t final: Even where...
The Supreme Court of Canada's recent ruling that administrative monetary penalties do not offend constitutional rights will likely have a “chilling” effect on tax advisers, Toronto tax litigation lawy...
Advocate Daily originally published, “Passion, talent not enough to prove business activities”, in July 2015. A recent Tax Court of Canada decision that questioned whether a hockey blog is a business ...
In Tax Court of Canada appeals, the pleadings are the most important documents that the parties file. The Appellant (taxpayer) is required to file a Notice of Appeal, and the Respondent Minister of Na...
The Federal Court of Appeal has recently made it clear that the decision in Canada v. Sommerer [2012] FCA 207 is correct and subsection 75(2) of the Income Tax Act does not apply to property sold for ...
A significant costs award and even-handed analysis provided by the Tax Court of Canada in a recent case will serve to remind the government that tax litigation carries financial consequences, Toronto ...
The Tax Court of Canada has ruled the allowable limits provision of the TCC tariff is not definitive and judges have the discretion to exceed amounts set out in it.
A recent Tax Court of Canada decision will hopefully persuade the Minister of National Revenue to reconsider the routine imposition of harsh penalties for failing to report income, Toronto tax litigat...
In a potentially precedent-setting case, the Tax Court of Canada has determined that the often “harsh” penalties imposed on taxpayers who misreport income in two out of four years cannot be imposed if...
The Tax Court of Canada in October last year released its reasons for judgment in Brent Kern Family Trust v. Canada [2013] T.C.J. No. 286. The case was the TCC’s first opportunity to review and apply ...
Advocate Daily initially originally published, "Tax court should go further when awarding costs”, in March 2014. Although a recent Tax Court of Canada decision shows a continued trend towards higher c...
In its first decision on third party penalties, the Tax Court of Canada has curtailed the power of the Canada Revenue Agency; as expected, the CRA has already decided to appeal.
Key Takeaways Expert credibility matters: CRA’s independent, balanced expert persuaded the Court, while the taxpayer’s conflicted expert undermined its case. Evidence must stand on its own: Expert rep...
Subsection 169(1) of the Income Tax Act (the “Act”) provides, in part, that a taxpayer may institute an appeal in the Tax Court of Canada to dispute a (re)assessment or notice of confirmation (jointly...
Section 227.1 of the Income Tax Act and section 323 of the Excise Tax Act provide that the CRA can assess corporate directors personally for a corporation’s failure to remit payroll deductions and GST...
Stephen Kaegi and his wife, Elise Dallaire, learned the hard way that music, love and taxes don't always mix well. The Ontario couple have spent two years trying to persuade federal tax officials that...