fmc-law.com RSS Feeds - Publications - Taxhttp://www.fmc-law.com/upload_net/rss/en/Tax.xmlThu, 31 May 2012 10:01:39 GMTen-us5Among the more significant proposed changes to the Income Tax Act (Canada) (the “Act”) announced in the March 29, 2012 federal Budget (the “Budget”) are the so-called “foreign affiliate dumping” rules that will affect Canadian resident corporations controlled by non-resident shareholders where the Canadian corporation invests in foreign affiliates. A number of technical issues arise under the proposed legislation. This article briefly reviews the proposed legislation, and specifically considers the application of the new rules where the Canadian-resident corporation is an unlimited liability company (“ULC”).http://www.fmc-law.com/Publications/0512_What_Happens_If_Your_CRIC_Is_A_ULC.aspxThu, 17 May 2012 06:00:00 GMThttp://www.fmc-law.com/Publications/0512_What_Happens_If_Your_CRIC_Is_A_ULC.aspxIn TransAlta Corporation v. The Queen, 2012 TCC 86 (T.C.C.) ("TransAlta”), the Tax Court of Canada had to consider whether a corporation could deduct the value of shares paid as bonuses to employees for past services rendered. TransAlta argued that the value of the shares was deductible as if it had paid the bonuses in cash. The Crown argued that the value of the shares was not deductible pursuant to paragraph 7(3)(b) of the Income Tax Act (the “Act”), which essentially prevents an employer from deducting an amount of a stock option benefit conferred on an employee. The issue to be resolved, therefore, was whether the plan to pay the bonuses with shares was a stock option plan for the purposes of section 7. Republished with permission from CCH Canadian Ltd. Read more by clicking the dowload button.http://www.fmc-law.com/Publications/0412_Iorio_Samantha_Tax_Topics_CCH.aspxThu, 19 Apr 2012 06:00:00 GMThttp://www.fmc-law.com/Publications/0412_Iorio_Samantha_Tax_Topics_CCH.aspxThe March 29, 2012 Canadian federal budget (the “Budget”) proposes a number of changes to Canada’s thin capitalization rules that may have significant implications to cross-border financing. Clients should review existing financing arrangements to assess the potential implication of these changes and must carefully consider proposed Canadian investments to ensure compliance with the new regime. Read more by clicking the download button.http://www.fmc-law.com/Publications/0512_Beefing_Up_Canada_Thin_Capitalization_Rules.aspxSun, 01 Apr 2012 06:00:00 GMThttp://www.fmc-law.com/Publications/0512_Beefing_Up_Canada_Thin_Capitalization_Rules.aspxFederal Budget 2012 This annual publication is produced by the National Tax Group of Fraser Milner Casgrain LLP (FMC), together with CCH.  This edition contains editorial comments regarding the tax proposals announced in the 2012 Federal Budget by the Honourable James M. Flaherty, P.C., M.P., Minister of Finance.  Tax Analysis Several FMC tax lawyers are on the Editorial Board of the CCH Canadian Tax Reporter, and even more are involved in writing the CCH tax commentary in the Reporter. On March 29, 2012, FMC tax lawyers and CCH participated in the Budget lockup to produce the CCH commentary on the Budget's tax measures. Following the lockup, the document was reviewed by members of FMC’s National Tax Group who also had the opportunity to provide their commentary. To view the Resolutions and CCH editorial commentary, please click here. Federal Budget Documents For complete budget documents, please click here. Read more by clicking on the download button.http://www.fmc-law.com/Publications/0312_Focus_On_Tax_Federal_Budget_2012.aspxThu, 29 Mar 2012 06:00:00 GMThttp://www.fmc-law.com/Publications/0312_Focus_On_Tax_Federal_Budget_2012.aspxThere are not many cases where a taxpayer has sued the Canada Revenue Agency successfully for any sort of misfeasance. There may be several reasons for this: first, in general the CRA tries its best to do a good job and is not often guilty of misfeasance. Second, taxpayers often just want to get on with their lives and do not want to spend several years and tens of thousands of dollars in legal fees suing the CRA. But third, there is a difficult issue to address as to which court has jurisdiction to hear the suit. That was the subject of a recent decision of the British Columbia Court of Appeal in Leroux v. Canada Revenue Agency. Reproduced with permission from CCH Canadian Limited. Read more by clicking the download button.http://www.fmc-law.com/Publications/0312_Nitikman_Joel_To_Sue_Or_Not_To_Sue.aspxWed, 21 Mar 2012 06:00:00 GMThttp://www.fmc-law.com/Publications/0312_Nitikman_Joel_To_Sue_Or_Not_To_Sue.aspxTax law geeks call it “form over substance” - how Canadians are taxed on their actual relationships and transactions rather than what they intended those to be. However, mistakes can be made - and sometimes the tax assessed is not reflective of the true nature of the situation at hand. One solution is to seek an order of rectification, which is an equitable remedy granted by a provincial superior court that has the effect of correcting mistakes in documents that don’t accord with the parties’ agreement. Generally, a court will only grant rectification where the taxpayer is able to demonstrate that the parties to an agreement had a common and continuing intention and that the written instrument does not reflect the true agreement of the parties. Read more by clicking the download button.http://www.fmc-law.com/Publications/0312_Trust_me_Timothy_Fitzsimmons.aspxTue, 13 Mar 2012 06:00:00 GMThttp://www.fmc-law.com/Publications/0312_Trust_me_Timothy_Fitzsimmons.aspxThe Tax Court has once again considered the meaning of the phrase “beneficial owner” for purposes of the tax treaty between Canada and the Netherlands. It has also once again ruled in favour of the taxpayer in determining that a Dutch holding company was the “beneficial owner” of amounts received from a related Canadian company. On February 24, 2012, the Tax Court of Canada released its eagerly-anticipated decision in Velcro Canada Inc. v. Her Majesty the Queen, which addresses the applicable Canadian withholding tax rate in respect of cross-border royalty payments within a multinational corporate group. The decision comes almost four years after the Tax Court released its landmark decision in Prévost Car Inc. v. The Queen, which dealt with the identical treaty interpretational issue in the context of cross-border dividend payments. These decisions are relevant to any multinational enterprise using a foreign holding company as an investment/financing vehicle and provide considerable comfort concerning the tax effectiveness of such structures. Read more by clicking the download button.http://www.fmc-law.com/Publications/0212_Peters_Matthew_Beneficial_Owner_CRA_Assessment_of_Velcro_Does_Not_Stick.aspxMon, 27 Feb 2012 07:00:00 GMThttp://www.fmc-law.com/Publications/0212_Peters_Matthew_Beneficial_Owner_CRA_Assessment_of_Velcro_Does_Not_Stick.aspxThe new Canada Not-for-Profit Corporations Act ("NFP Act") came into force on October 17, bringing with it a new framework for the governance and incorporation of associations, charities and other federal not-for-profit organizations. The presentation below provides a review of most significant elements of the NFP Act, with an overview of the following points: New Requirements for By-laws Corporate Obligations Directors' Duties Members' Enhanced Rights Financial Accounting and Disclosure 5 Steps to Transition Learn more by viewing the Slideshare presentation below. Canada Not-for-Profit Corporations Act View more presentations from FMC Law This presentation contains examples of the kinds of issues companies dealing with Canada Not-for-Profit Corporations Act could face. If you are faced with one of these issues, please retain professional assistance as each situation is unique.http://www.fmc-law.com/Publications/0212_Canada_Not_for_Profit_Corporations_Act.aspxWed, 22 Feb 2012 07:00:00 GMThttp://www.fmc-law.com/Publications/0212_Canada_Not_for_Profit_Corporations_Act.aspxIn this article, Jacques Plante discusses CIBC World Markets Inc. v. Her Majesty the Queen, a decision of the Federal Court of Appeal reducing the effectiveness of sections 403 of the Federal Courts Rules and 147 of the Tax Court of Canada Rules (General Procedure). Based on this judgment, it appears as though the jurisprudence is moving towards creating a clear requirement for a principled basis for settlement in order for such settlement offers to have any relevance to or impact on cost awards. The parties to a dispute will have to be careful when drafting settlement offers if they hope to trigger any additional cost consequences after a successful hearing. Read more by clicking the download button.http://www.fmc-law.com/Publications/0212_Plante_Jacques_Settlement_Offers.aspxThu, 16 Feb 2012 07:00:00 GMThttp://www.fmc-law.com/Publications/0212_Plante_Jacques_Settlement_Offers.aspxOn December 16, 2011, the Supreme Court of Canada (the “SCC”) released its  long-awaited decision in Copthorne Holdings Ltd. v. The Queen, 2012 DTC 5007. In a unanimous judgment, the SCC dismissed the appeal of the taxpayer and affirmed the Plans decisions of both the Federal Court of Appeal and the Tax Court of Canada. In reasons written by Justice Marshall Rothstein, the SCC concluded that the transactions in question contravened the general anti-avoidance rule (“GAAR”) contained in section 245 of the Income Tax Act (the “Act”) and were properly reassessed by the Minister of National Revenue (“Minister”). Reproduced with permission from CCH Canadian Limited. Read more by clicking the download button.http://www.fmc-law.com/Publications/0112_Harris_Mike_CCH_Tax_Topics.aspxFri, 20 Jan 2012 07:00:00 GMThttp://www.fmc-law.com/Publications/0112_Harris_Mike_CCH_Tax_Topics.aspxTaxpayers that have implemented cross-border tower financing structures and that have claimed a Canadian tax deduction for any U.S. taxes paid should revisit their structures carefully in light of the Tax Court of Canada’s recent decision in FLSMIDTH Ltd., v. The Queen (2012 TCC 3), which is the Court’s first decision concerning tower structures. Read more by clicking the download button.http://www.fmc-law.com/Publications/0112_Peters_Matthew_Tower_Financing_Deduction_Denied.aspxFri, 13 Jan 2012 07:00:00 GMThttp://www.fmc-law.com/Publications/0112_Peters_Matthew_Tower_Financing_Deduction_Denied.aspxOn December 16, 2011, the Supreme Court of Canada released its latest General Anti-Avoidance Rule (GAAR) decision in Copthorne Holdings Ltd. v. Canada.  The appeal was heard on January 21, 2011 by all nine of the Justices (Chief Justice McLachlin, Justice Binnie, Justice LeBel, Justice Deschamps, Justice Fish, Justice Abella, Justice Charron, Justice Rothstein and Justice Cromwell). Since the date of the hearing, Justices Binnie and Charron have retired.  This was the fourth GAAR appeal heard by the Supreme Court (the earlier cases were Canada Trustco Mortgage Co. v. Canada, Mathew v. Canada and Lipson v. Canada). Read more by clicking the download button.http://www.fmc-law.com/Publications/1211_Spiro_David_Crown_Wins_GAAR.aspxMon, 19 Dec 2011 07:00:00 GMThttp://www.fmc-law.com/Publications/1211_Spiro_David_Crown_Wins_GAAR.aspxOn November 29, 2011, the Canada Revenue Agency (“CRA”) and Revenu Québec (“RQ”) participated in the Roundtable discussion at the Annual Conference of the Canadian Tax Foundation. The discussion this year covered a wide range of issues. Interestingly, in contrast to the last few years, the CRA announced a number of substantive policy changes at the Roundtable. There was a significant focus on international issues, with multiple questions on permanent establishments (“PE”) and taxable Canadian property (“TCP”). The participants were Francois Bordeleau and Jim Gauvreau from the CRA and Bernard Nolan from RQ. The Roundtable was chaired by Claude Jodoin and Pierre Bourgeois. Republished with permission. Read more by clicking the download button.http://www.fmc-law.com/Publications/1211_tax_topics_fitzsimmons.aspxThu, 15 Dec 2011 07:00:00 GMThttp://www.fmc-law.com/Publications/1211_tax_topics_fitzsimmons.aspxThe CRA was asked whether the net smelter return of an asteroid mine is taxable under the Income Tax Act. The taxpayer is owned by Canadian investors, has Canadian directors and managers, employs Canadian staff, uses Canadian resources, and has its headquarters in Canada. The taxpayer is considering the positive and negative impacts of an outer space asteroid mining venture. The taxpayer stated that the Act requires taxpayers to pay income tax on their “worldly” income from all sources. The taxpayer interpreted “world” to refer to the domain of planet Earth. Accordingly, in the taxpayer’s view, the net smelter return of an asteroid mine earned by a Canadian corporation would not be taxable under the Act if the sale occurs at the shipping point (i.e., in outer space). Republished with permission. Read more by clicking the download button.http://www.fmc-law.com/Publications/1111_Tax_Topics_Fitzsimmons_November_2011.aspxThu, 10 Nov 2011 07:00:00 GMThttp://www.fmc-law.com/Publications/1111_Tax_Topics_Fitzsimmons_November_2011.aspxThe continued expansion of globalization and foreign investment has led to the use of, and investment in, non-traditional, foreign entities. One of the most prevalent entities in use in Canada is a limited liability company established under the laws of a state of the United States (a “US LLC”). Under US federal (and in some cases state) income tax law, a US LLC may elect to be treated (or in some cases is deemed to be treated) as a flow-through entity rather than as a corporation. An issue that arises in many contexts is whether a US LLC is a partnership or a corporation for Canadian tax purposes. Reproduced with permission from CCH Canadian Limited. Read more by clicking the download button.http://www.fmc-law.com/Publications/Fabbro_Jessica_What_Is_An_LLC.aspxThu, 20 Oct 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/Fabbro_Jessica_What_Is_An_LLC.aspxSince 1952 the Financial Administration Act has permitted the “Governor in Council” (which means the Governor General on the advice of the Federal Cabinet) to order that money owed to the federal government be remitted to the debtor. Originally, remission orders could be granted only in respect of taxes. In 1991 this was expanded to include all forms of debts. Remission orders are a valuable tool for tax practitioners. Although a remission order cannot be granted by the Tax Court of Canada or the Federal Court, several recent decisions reveal circumstances where such an order was considered by the Court to be appropriate. These decisions serve as a useful reminder that this remedy should not be Eligibility of forgotten when considering all possible relief available to a taxpayer. Reproduced with permission from CCH Canadian Limited. Read more by clicking the download button.http://www.fmc-law.com/Publications/1011_Harris_Mike_Tax_Topics_CCH.aspxTue, 18 Oct 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/1011_Harris_Mike_Tax_Topics_CCH.aspxThe Canada Not-for-Profit Corporations Act ("NFP Act") enters into force on Monday, October 17, 2011. The NFP Act brings with it a new framework for the governance and incorporation of associations, charities and other federal not-for-profit organizations. The article below provides a review of most significant elements of the NFP Act, with an overview of the following points: New Requirements for By-laws Corporate Obligations Financial Accounting and Disclosure 5 Steps to Transition Read more by clicking the download button.http://www.fmc-law.com/Publications/1011_Focus_Canada_Not_For_Profit.aspxMon, 17 Oct 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/1011_Focus_Canada_Not_For_Profit.aspxFMC Partner Gordon Funt along with Chuck Burkett, C.A., Professor David Duff and Craig Sturrock, Q.C. presented "Professional Ethics in a Tax World - Self-Assessment, Self-Incrimination, The Charter, Crown Fairness and Other Matters" at the B.C. Tax Conference. If you were to rob a bank, you would have the right to remain silent, one aspect of the right against self incrimination. The Crown would have to prove beyond a reasonable doubt that you were guilty of the offence of robbery under our Criminal Code. As we know, the Income Tax Act contains offences for tax evasion and the like that may also attract imprisonment where the Crown proves beyond a reasonable doubt that the accused committed the offence. First published by the Canadian Tax Foundation - 2011 British Columbia Tax Conference (Vancouver, September 26-27, 2011). Read more by clicking the download button.http://www.fmc-law.com/Publications/1011_Funt_Gordon_Professional_Ethics_Tax_World.aspxFri, 07 Oct 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/1011_Funt_Gordon_Professional_Ethics_Tax_World.aspxThe Alberta Court of Appeal released its decision in this case on July 21, 2011. Brick Protection Corp. (Brick Protection; now Trans Global Warranty Corp.) was a sister corporation of the Brick Warehouse Corp. (The Brick). Brick Protection sold extended warranties to consumers on appliances and furniture purchased through The Brick. The issue: Was Brick Protection Corp. doing business as an insurance company in Alberta? If so, they would be subject to insurance corporation tax under Part IX of the Alberta Tax Act (the Act; now in the Alberta Corporate Tax Act).  Read more by clicking the download button.http://www.fmc-law.com/Publications/0911_Focus_On_Tax_Ken_Whitelaw.aspxWed, 21 Sep 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0911_Focus_On_Tax_Ken_Whitelaw.aspxThe recent decision of the Federal Court of Appeal in Bozzer v. The Queen, 2011 DTC 5106, represents a victory for all Canadian taxpayers, as it overturns an overly-restrictive interpretation of a provision designed to grant taxpayer relief in appropriate circumstances. This article includes discussion on the following: Overview of Reasons for Judgment The Significance of the Bozzer Decision Republished with permission from CCH Canadian Ltd. Read more by clicking the download button.http://www.fmc-law.com/Publications/0811_Gentile_Angelo_Tax_Topics_August2011.aspxThu, 18 Aug 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0811_Gentile_Angelo_Tax_Topics_August2011.aspxSubsection 75(2) of the Income Tax Act is an anti-avoidance provision. It provides that if a person contributes property to a trust, but under the conditions of the trust the property may revert to the person or the person retains certain powers over that property, then any income or loss from that property is attributed to the person. In a recent decision of Miller J, Sommerer v. The Queen, the Tax Court said that the purpose of this provision was not clear, but with all due respect, the writer disagrees. This article also includes discussion on the following: Existence of a Trust Subsection 75(2) Textual Interpretation Contextual Interpretation Purposive Interpretation Revert Read more by clicking the download button.http://www.fmc-law.com/Publications/0711_Who_Is_The_Person_Subsection_752_Estate_Planner.aspxMon, 11 Jul 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0711_Who_Is_The_Person_Subsection_752_Estate_Planner.aspxThe Canada Border Services Agency (CBSA) has recently released its 23 “target” national audit priorities for the coming year.  In addition to the national audit priorities listed below, the CBSA is also conducting audits of large file importers and other strategic targets.  Importers who do not plan for a potential customs audit do so at their own peril. The following information will highlight some of the current CBSA audit priorities and give some insight into how to prepare for a CBSA audit and manage potential risk from customs duty, punitive interest and penalty assessments that could arise in the event of a negative CBSA audit finding.  Proper planning and the implementation of appropriate compliance measures will assist importers in avoiding these potential customs risks. Read more by clicking the download button.http://www.fmc-law.com/Publications/0611_Focus_On_Tax.aspxTue, 28 Jun 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0611_Focus_On_Tax.aspxSubsection 75(2) of the Income Tax Act is an anti-avoidance provision. It provides that if a person contributes property to a trust, but under the conditions of the trust the property may revert to the person or the person retains certain powers over that property, then any income or loss from that property is attributed to the person. In a recent decision of Miller J, Sommerer v. The Queen, the Tax Court said that the purpose of this provision was not clear, but with all due respect, the writer disagrees. This article also includes discussion on the following: Existence of a Trust Subsection 75(2) Textual Interpretation Contextual Interpretation Purposive Interpretation Revert Read more by clicking the download button.http://www.fmc-law.com/Publications/0711_Who_Is_The_Person_Subsection_752.aspxThu, 16 Jun 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0711_Who_Is_The_Person_Subsection_752.aspxGordon Funt and Matthew Peters co-wrote the article "Braydon - The Requisite Intent for Fraudulent Conveyances" in the National Creditor/Debtor Review. The British Columbia Court of Appeal’s decision in Abakhan & Associates Inc. v. Braydon [Braydon] is of signal import to the insolvency bar and trustees. Leave to appeal to the Supreme Court of Canada has been denied (McLachlin C.J., Abella and Cromwell JJ.). Braydon defines the requisite intent for a fraudulent conveyance under B.C.’s Fraudulent Conveyance Act [BCFCA].Reproduced with permission of the publisher from National Creditor/Debtor Review, Vol. 26, No. 1, March 2011.Read more by clicking the download button.http://www.fmc-law.com/Publications/0611_National_Creditor_Debtor_Review_Braydon_Requisite_Intent_Fraudulent_Conveyences.aspxMon, 13 Jun 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0611_National_Creditor_Debtor_Review_Braydon_Requisite_Intent_Fraudulent_Conveyences.aspxGordon Funt and Matthew Peters co-wrote the article "Braydon - The Requisite Intent for Fraudulent Conveyances" in the National Creditor/Debtor Review. The British Columbia Court of Appeal’s decision in Abakhan & Associates Inc. v. Braydon [Braydon] is of signal import to the insolvency bar and trustees. Leave to appeal to the Supreme Court of Canada has been denied (McLachlin C.J., Abella and Cromwell JJ.). Braydon defines the requisite intent for a fraudulent conveyance under B.C.’s Fraudulent Conveyance Act [BCFCA]. Reproduced with permission of the publisher from National Creditor/Debtor Review, Vol. 26, No. 1, March 2011. Read more by clicking the download button.http://www.fmc-law.com/Publications/0611_Funt_Gordon_Braydon_The_Requisite_Intent_Fraudulent_Conveyances.aspxFri, 10 Jun 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0611_Funt_Gordon_Braydon_The_Requisite_Intent_Fraudulent_Conveyances.aspxFederal Budget 2011 - Update       This annual publication is produced by the National Tax Group of Fraser Milner Casgrain LLP (FMC), together with CCH.This edition contains editorial comments regarding tax proposals announced in the first Federal Budget on March 22, 2011, and the second Federal Budget on June 6, 2011, by the Honourable James M. Flaherty, P.C., M.P., Minister of Finance.  Tax AnalysisSeveral FMC tax lawyers are on the Editorial Board of the CCH Canadian Tax Reporter, and even more are involved in writing the CCH tax commentary in the Reporter. On March 22, 2011, FMC tax lawyers and CCH participated in the Budget lockup to produce the CCH commentary on the Budget's tax measures. Following the lockup, the document was reviewed by members of FMC’s National Tax Group who also had the opportunity to provide their commentary.On June 6, 2011, the government did not conduct a Budget lockup, but instead made the Budget documents available at 4 p.m. Members of FMC's National Tax Group and CCH reviewed both the first and second Budget documents to provide updated and complete commentary. To view the Resolutions and CCH editorial commentary, please click here.Federal Budget Documents       For complete June 6 Budget documents, please click here. For complete March 22 Budget documents, please click here.Read more by clicking on the download button.http://www.fmc-law.com/Publications/0611_Focus_On_Tax_Federal_Budget_2011.aspxMon, 06 Jun 2011 06:00:00 GMThttp://www.fmc-law.com/Publications/0611_Focus_On_Tax_Federal_Budget_2011.aspx