Cases
Kaleidescape Inc. v. MNR, 2014 ONSC 4983
In order to try to qualify a Canadian corporation ("K-Can'), which economically was a subsidiary of a U.S. corporation ("K-US"), as a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Rectification & Rescission | clarification that directions to a trustee shareholder were to be made by the mooted CCPC's board rather than a non-resident executive | 419 |
Canada v. Bioartificial Gel Technologies (Bagtech) Inc., 2013 DTC 5155 [at 6361], 2013 FCA 164
In the two taxation years in question, non-residents held 60%, then 70%, of the voting (Class A) shares of the taxpayer. However, provisions of...
Canada v. Perfect Fry Company Ltd., 2008 DTC 6472, 2008 FCA 218
The taxpayer, a Canadian-resident corporation, was wholly owned by a Canadian public corporation ("Perfect Fry") which, in turn, was controlled by...
Sedona Networks Corporation v. Canada, 2007 DTC 5359, 2007 FCA 169
An agreement under which a Canadian-resident private corporation ("Ventures") was accorded the right to exercise, in its sole discretion, the...
Silicon Graphics Ltd. v. Canada, 2002 DTC 7113, 2002 FCA 260
The taxpayer, which was a Canadian corporation with Canadian management, had effected a public offering of its common shares in the U.S. as a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | must be right to affect board or directly influence shareholders | 187 |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(6) | 65 | |
| Tax Topics - Statutory Interpretation - Hansard, explanatory notes, etc. | 23 | |
| Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(2) | 56 | |
| Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. | 64 |
Parthenon Investments Ltd. v. Canada (National Revenue), 97 DTC 5343 (FCA)
All the voting shares of the taxpayer were owned by a Canadian corporation all of whose voting shares were owned by a U.S. corporation. All the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 44 |
International Mercantile Factors Ltd. v. The Queen, 90 DTC 6390, [1990] 2 CTC 137 (FCTD), aff'd 94 DTC 6365 (FCA)
A Canadian-controlled private corporation ("Rieris") held 25% of the common shares of the taxpayer and an additional number of Class A shares...
Scandia Plate Ltd. v. The Queen, 83 DTC 5009, [1982] CTC 431 (FCTD)
"The word 'controlled' as used in the context of the definition means de jure control and not de facto control."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Effective Date | 100 | |
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(1) | 178 |
See Also
Durocher v. The Queen, 2016 DTC 1013 [at 2584], 2015 TCC 297, aff'd 2016 CFA 299
The nine resident-individual taxpayers held all the shares of a Canadian corporation (“RJCG”) directly up until April 2005 and indirectly...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Illegality | potential illegality of an option to acquire control of a private corporation did not nullify the option, so that the corporation was not a CCPC | 171 |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | potential illegality of 3rd-party option to acquire control of a subsidiary corporation did not nullify the option, so that the subsidiary was not a CCPC | 201 |
Bioartificial gel technologies (Bagtech) inc. v. The Queen, 2013 DTC 1048 [at 228], 2012 TCC 120, aff'd 2013 FCA 164 supra.
In the two taxation years in question, non-residents held 60%, then 70%, of the voting (Class A) shares of the taxpayer. However, provisions of...
Perfect Fry Company Ltd. v. The Queen, 2007 DTC 588, 2007 TCC 133, aff'd supra 2008 DTC 6472, 2008 FCA 218
Paris J. found (at p. 600) that paragraph (b) of the definition "was not intended to require an attribution of the ownership of shares of a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(c) | 92 |
Avotus Corporation v. The Queen, 2007 DTC 215, 2006 TCC 505
A non-resident shareholder of the taxpayer, who owned one-half of the taxpayer's shares and, by virtue of being chairman, was entitled pursuant to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | 70 | |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | 91 | |
| Tax Topics - Income Tax Act - Section 9 - Agency - Agency | 97 | |
| Tax Topics - General Concepts - Effective Date | retroactive agency agreement | 124 |
McClintock v. The Queen, 2003 DTC 576, 2003 TCC 259
The Minister took the position that the taxpayer ceased to be a Canadian-controlled private corporation on July 17, 1990 when it completed an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Fair Market Value - Shares | 50 |
Administrative Policy
24 March 2017 External T.I. 2016-0662381E5 F - Control - unanimous shareholders agreement
A mooted Canadian-controlled private corporation (Opco) had its voting common shares held 50-50 by a single non-resident, and by three Canadian...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) - Subparagraph 251(5)(b)(i) | highly contingent secondary call right of a non-resident on shares of minority residents undercuts for CCPC purposes their USA right to appoint half the board | 601 |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) - Subparagraph 251(5)(b)(ii) | no application if non-resident under USA cannot control board decision to redeem residents’ shares – applies if automatic redemption requirement | 470 |
10 June 2016 STEP Roundtable Q. 7, 2016-0634911C6 - Deemed Resident Trust and CCPC Status
A trust which is factually non-resident but which is deemed to be resident in Canada under s. 94(3) controls a Canadian corporation. Would the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) | CCPC status not included in s. 94(3)(a) | 42 |
6 May 2014 CALU Roundtable, 2014-0523301C6 - Control - unanimous shareholders agreement
Does CRA accept Bagtech? After referring to the position in ITTN no. 44) that "unanimous shareholder agreements are not to be considered in...
22 December 2009 Internal T.I. 2009-0343331I7 F - Determination of CCPC Status
A Quebec corporation (the “Corporation”) whose only outstanding shares were common shares, agreed in the Contract with a non-resident...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 220 - Subsection 220(2.2) | s. 220(2.2) precluded accepting a late amendment | 81 |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | de facto control given control of financing and significant influence on decisions | 222 |
29 August 2000 Internal T.I. 2000-0023187 F - Société privée sous contrôle canadien
After noting that a limited partnership with a sole general partner is generally considered to be controlled by that general partner, CRA...
1 September 1995 External T.I. 5-950393
Where a non-resident owns 60% of the voting shares of a Canadian private operating company, that company will not qualify as a Canadian-controlled...
8 December 1994 External T.I. 9419055 - CCPC,NON-RESIDENT
Provided the provisions of ss.265(5.1) and 251(5)(d) do not apply, two non-resident related individuals who each own 50 voting common shares of a...
Income Tax Regulation News, Release No. 3, 30 January, 1995 under "Canadian-Controlled Private Corporation"
The control test envisages situations where over 50% of the shares of the corporation are owned by one or more non-residents or by one or more...
11 September 1992 T.I. (Tax Window, No. 24, p. 15, ¶2202)
A corporation controlled by an individual who is a resident by virtue only of the sojourning rule in s. 250(1)(a) will qualify as a CCPC, assuming...
91 C.R. - Q.9
The ownership of all the common shares of the corporation by a trust all of whose beneficiaries are non-residents will not preclude the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | 21 |
3 October 89 T.I. (March 1990 Access Letter, ¶1153)
s. 256(1.2)(c) relates to whether a corporation is associated, and therefore is not applicable for determining control for purposes of s. 125(7)(b).
3 January 1990 T.I. 5-9256 (Tax Window Files "'Meaning of Canadian-Controlled Private Corporation' - Control Test"
Where a Canadian-resident private corporation owns all the shares of a resident Canadian corporation ("N") which, in turn, owns all the shares of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | 79 |
Paragraph (a)
Cases
Bresse Syndics Inc. v. Canada, 2021 FCA 115
A public company (CO2 Public) operating a high-tech business in the field of carbon dioxide capture and management carried on its SR&ED through a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | a trust deed requirement that the trustees be the Pubco directors gave Pubco de facto control of a trust subsidiary | 306 |
See Also
CO2 Solution Technologies Inc. v. The Queen, 2019 TCC 286, aff'd sub nom. Bresse Syndics Inc. acting for the bankruptcy of CO2 Solution Technologies Inc. v. The Queen, 2021 FCA 115
After a high-tech company (CO2 Public) engaged in the capture and management of carbon dioxide became a public corporation (thereby losing the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) - Subparagraph 251(5)(b)(i) | a declaration of trust’s requiring the trustees to be the Pubco directors likely represented a s. 251(5)(b)(i) right of Pubco over trust investment | 291 |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | a declaration of trust requiring the trustees to be the Pubco directors gave Pubco de facto control of a trust sub | 248 |
Administrative Policy
19 May 2010 Internal T.I. 2008-0279441I7 F - Canadian-controlled private corporation
During the relevant taxation years of Corporation A (which had claimed the small business deduction), its shares were held equally by Corporation...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) - Subparagraph 251(5)(b)(i) | future acquisition right under a USA gave indirect 50% non-resident shareholder de jure control | 104 |
Paragraph (b)
Administrative Policy
14 June 2010 Internal T.I. 2010-0366611I7 F - Determination of CCPC Status
At issue was whether a start-up Canadian private corporation engaged in SR&ED was a Canadian-controlled private corporation (“CCPC”). ...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) | sole beneficiary of a trust did not have a s. 251(5)(b) right to trust shares | 44 |
| Tax Topics - General Concepts - Agency | application of Kinguk Trawl test of agency | 165 |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | non-resident shareholder with 60%+ economic interest, extensive veto rights and responsibility for future funding of R&D work had de facto control | 457 |
27 February 2008 Internal T.I. 2008-0265901I7 F - Canadian-controlled private corporation
A majority of the voting shares of a mooted CCPC were held by non-residents who did not form a group. The taxpayer acknowledged that those shares...
13 January 2003 External T.I. 2002-0176905 F - CPCC Status
CCRA provided an overview of the application of the different CCPC tests to a factual example, and indicated that the para. (b) test would not...