Territorial Limits

Table of Contents


1068754 Alberta Ltd., trustee of DGGMC Bitton Trust v. ARQ, 2018 QCCA 8 (Quebec Court of Appeal)

communication to bank branch outside Quebec did not constitute a significant act outside Quebec

The ARQ, which was seeking to establish that the central management and control of an Alberta trust was in Quebec, issued a requirement to a Calgary branch of the Banque Nationale du Canada (“BNC”) for various bank records respecting the trust under the Quebec equivalent of ITA s. 231.2(1). The requirement was sent directly to the branch rather than to the BNC head office because this was required under s. 462(2) of the Bank Act. In finding that the ARQ had not exceeded its territorial competence in making this requirement, Hogue JCA stated:

Here we are not concerned with … a seizure outside of Quebec which, it is true, could require the seizing party to approach an authority of the foreign State with a view to obtaining its collaboration in order to proceed. …

The communication of the requirement to BNC through one of its branches situated outside Quebec is the sole external element that is present here. However, such communication is purely accessory and is insufficient to conclude that the ARQ exercised its powers of taxation or of audit outside of Quebec or exceeded its competence.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.2 - Subsection 231.2(1) the ARQ did not exceed its Quebec-based audit authority when it issued a s. 231.2 demand to a Calgary bank branch 450

Exida.Com Limited Liability Company v. Canada, 2010 DTC 5101, 2010 FCA 159

no filing requirement if no connection with Canada

Nöel, J.A. noted (at para. 23) that when s. 150(1) formerly simply provided that in the case of a corporation, a return shall be filed by a corporation for each taxation year, "with respect to non-resident corporations, the obligation to file could only extend to those that had some connection with Canada. To construe the provision as applying in the absence of any connection with Canada would give it a reach that could not have been intended."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 162 - Subsection 162(2.1) no substantive tax liability 64
Tax Topics - Income Tax Act - Section 162 - Subsection 162(7) "penalty" does not include nil penalty 90
Tax Topics - Statutory Interpretation - Ordinary Meaning purposive interpretation must be consistent with words 87

Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, [2004] 2 S.C.R. 427, 2004 SCC 45

presumption against extra-territorial effect

Binnie J. stated (at para. 54):

"While the Parliament of Canada, unlike the legislatures of the Provinces, has the legislative competence to enact laws having extraterritorial effect, it is presumed not to intend to do so, in the absence of clear words or necessary implication to the contrary ..."

Oceanspan Carriers Ltd. v. The Queen, 85 DTC 5621, [1986] 1 CTC 114 (FCTD), aff'd in part 87 DTC 5102, [1987] 1 CTC 210 (FCA)

non-application to previous non-resident existence

The following principle was applied by Rouleau, J.: "The mere fact of becoming a resident does not give the Minister - or Parliament - jurisdiction over the previous life or conduct of a corporate taxpayer." [CR.: 248(1) - "Income Bond"]

Clark v. Oceanic Contractors Inc., [1982] BTC 417, [1983] 1 All E.R. 133 (HL)

presumption against application to non-subjects

"[U]nless the contrary is expressly enacted or so plainly implied that the courts must give effect to it, United Kingdom legislation is applicable only to British subjects or to foreigners who by coming to the United Kingdom, whether for a short or a long time, have made themselves subject to British jurisdiction."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) carrying on trade was sufficient connection to jurisdiction 113

United States of America v. Harden, 63 DTC 1276, [1963] CTC 450, [1963] S.C.R. 366

revenue rule

The Court found that the principle that foreign states cannot directly or indirectly enforce their tax claims in Canada applied to prevent a foreign state (here, the U.S.A.) from taking a judgment of its own courts and bringing suit in Canada on that judgment.

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Revenue Rule U.S. tax judgment not enforceable in Canada 120


Baker, "The Trans-National Enforcement of Tax Liabilities", 1993 British Tax Review, No. 5, p. 313.