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6 November 2014- 11:16am Agnico-Eagle- Tax Court of Canada finds that the U.S. dollar principal of a convertible debenture should be considered on conversion to have been settled at the historical exchange rate Email this Content Woods J applied  Teleglobe for the proposition that where a debt is repaid with shares, the debt should be considered to have been settled for the amount for which such shares were issued.  ... Agnico’s alternative argument, that s. 51(1) "provides that on a conversion... there was no transaction that could give rise to a gain," was not considered. ... For example, it suggests that convertible debentures of income funds should be considered to be repaid for their principal rather than their appreciated value, so that no deemed interest arises under ss. 214(7) and (14). ...

5 October 2013- 1:19pm CRA accepts, based on Rezek, that elections required to be filed with a return are considered timely even if the return itself is late Email this Content CRA accepts the Rezek decision for the proposition that where there is a requirement to file an election with a taxpayer's return, the election's filing will be considered to be timely if the election is filed with an overdue return. However, the converse also holds- an election filed after the return's filing will be considered late even if it is filed before the return's due date.  ...

28 January 2015- 10:55am CRA considered that a negative ACB deemed gain from shares situated in Japan had a Canadian source for FTC purposes (i.e., no FTC) Email this Content Canco paid Japanese income tax on the capital gain reported on the distribution by it of its shares of a Japanese subsidiary ("Forco") to its non-resident parent as a dividend-in-kind, and claimed a foreign tax credit against the Canadian income tax payable on the taxable portion of the s. 40(3) gain realized as a result of a dividend distribution from Forco earlier in the year.  ... However, CRA indicated that "a taxable capital gain resulting from a deemed disposition of property is considered to be Canadian-source income, which therefore cannot be included in the foreign non-business income for purposes of claiming a FTC. ... Not surprisingly, CRA applied Meyer to state that "the tax paid to the Japanese tax authorities was voluntary and as such, should not be considered to be a ‘tax’. ...

13 July 2017- 1:04am CRA considered that exploring a placer jade deposit did not qualify as CEE Email this Content Para. ... The Minister of Natural Resources advised CRA that nephrite (a type of jade) to be extracted from the in-situ deposits on the subject property was an industrial mineral contained in non-bedded deposits – but excluding placer nephrite deposits, which were considered to fail the quoted test. ... CRA itself considered that the placer nephrite deposit also did not qualify as a “base or precious metal deposit.” ...

2 June 2022- 10:32pm CRA indicates that a spouse who was a registered co-owner of a property could be considered its beneficial owner even though she did not contribute to its purchase Email this Content S. 45(2) permits a taxpayer to elect to avoid a deemed disposition from a conversion of “property of the taxpayer” from personal to income-producing use. After noting that under s. 45, as in the rest of the Act, the quoted reference would be to the beneficial rather than legal owner, CRA went on to note that a wife who legally was the co-owner of the home in question (which had been converted to rental use) could be considered to be a ½ beneficial owner of the house for these purposes even though her husband provided all the purchase funds and had reported all the rental income. ... It concluded: [I]f both spouses are considered to have beneficial ownership … they would both be required to file the election …. ...

31 May 2017- 11:13pm MP Western Properties – Tax Court of Canada states that the Crown must produce all documents “considered by officials involved in or consulted during” a GAAR-related audit Email this Content Predecessors of the taxpayers had been acquired for their losses in transactions where less than 50% of their voting shares, but more than 90% of their non-voting participating shares, had been acquired. ... Miller J stated: … It is my view that in a GAAR appeal, draft documents prepared in the context of a taxpayer’s audit or considered by officials involved in or consulted during the audit and assessment of the taxpayer should be disclosed. ...

7 November 2019- 11:57pm CRA considered, and declined, extending its wash-trading policy to supplies made to municipalities Email this Content In assessing a “wash transaction,” CRA will automatically waive a significant portion of the interest that was assessable (or all of it, in the context of a voluntary disclosure). However, Memorandum 16-3-1 states that municipalities, which are eligible for 100% GST rebates, are not considered to have received a wash transaction. ...

17 July 2017- 12:54am CRA considered that s. 55(2) did not apply to dividends paid only for asset protection and QSBC-status purposes, and that safe income was allocated between 2 classes of participating shares pro rata to their dividend entitlements Email this Content Two unrelated individuals hold a portion of their equal investments in Opco in the form of equal direct common shareholdings and the balance through an equally owned Holdco, which holds Class X shares of Opco that are entitled to receive a proportion of the earnings of Opco and are redeemable for an amount equal to that proportionate amount of such undistributed earnings plus their nominal issuance price. CRA was guardedly amenable to the proposition that dividends paid on the Class X shares could be considered to be paid only for purposes of asset protection and eliminating excess liquidity that could prejudice this status of the common shares as qualified small business corporation shares. ...

19 July 2020- 10:44pm CRA considered that promotional services provided by a public sector body to a sponsor were not subject to GST/HST given the substantial advertising was not the main motivation [corrected link] Email this Content ETA s. 135 deem a supply by a public sector body (PSB) of a service, or a licence of copyright, a trade-mark, trade-name or other similar property to a “sponsor” for exclusive use by the sponsor in publicizing the sponsor’s business, to not be a supply – except that this rule is stated not to apply where the consideration for this supply by the PSB to the sponsor is “primarily” for radio, TV, newspaper, or magazine advertising. ... In explaining why the exclusion for TV advertising did not apply, CRA noted that in a previous file, it had concluded that even though “in monetary terms, the advertising represented a substantial part of the sponsorship, we considered that the reason a sponsor would want to sign an agreement and pay the funds was for the recognition of being a partner in the … events … and being able to use the logos associated with them.” ...