CRA deferred a PPT ruling request until the Alta decision

Regarding whether CRA has issued any assessments based on the MLI principal purpose test (“PPT”), CRA noted that it was premature for any assessments to have been issued (the first deadline for NR4 filings for payments to which the PPT might apply was March 31, 2021; and the returns for the earliest 12-month taxation years to which the MLI could apply have a filing due date of November 30, 2021).

Regarding a query on any PPT ruling requests received by CRA, it indicated that it had received one pre-ruling consultation request involving the payment of a dividend by a Canco to a corporation, residing in a Treaty country, which was not engaged in commercial activities other than holding the Canco shares and managing assets, and which was wholly-owned by a resident of a non-Treaty country. CRA concluded that it would await the decision in Alta before entertaining a ruling request. that the Treaty reduced dividend withholding to 5%.

Neal Armstrong. Summary of 5 May 2021 IFA Roundtable, Q.2 under Treaties – MLI – Art. 7(1).