Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Effect of Shell Canada case on assessing policy with respect to GAAR and substance over form.
Position: No formal change to policy - all Supreme Court decisions are relevant, however.
Reasons: Case is not definitive with respect to substance over form and predates GAAR..
Tax Executives Institute, Inc.
Liaison Meeting
December 6, 2000
Question 27 - "Substance Over Form" Assessments
Would the Agency comment on whether, in light of the Supreme Court decision in Shell Canada, it has changed its assessing practices under the General Anti-Avoidance Rule and the "substance over form" doctrine? The Court's comments in Shell Canada could certainly be interpreted as suggesting that a narrow view should be adopted in determining whether "substance over form" assessments should be made.
CCRA Response
The Agency has not made any formal change to its assessing policies as a result of the Shell case. However, in considering the application of any particular tax avoidance doctrine or the General Anti-Avoidance Rule any relevant decision of the Supreme Court, including the Shell decision, will be given significant weight.
It should be recognized that the Shell case did not deal with the current version of section 245 and thus has limited relevance to the interpretation of the General Anti-Avoidance Rule. Whether or not a series of transactions results in a tax benefit under subsection 245(1) or in a misuse or abuse under subsection 245(4) will often involve, in our view, a consideration of the economic effect of the series of transactions.
Prepared by David Palamar
File 2000-005650
December 2000
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