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26 March 2017- 9:59pm CRA permits professionals who are sharing payroll expenses to jointly open up a single payroll account without being considered to be a partnership Email this Content A group of dentists, who are not in partnership, wish to share the costs of staff such as receptionists and bookkeepers and also are shared employers of the staff, so that all of the staff remuneration paid by each dentist is exempted from GST/HST as a result of being paid qua employer. ...

3 January 2022- 10:50pm Christen – Federal Court finds that a voluntary disclosure planned before, but made after, the audit notification could be considered non-voluntary- but annuls the CRA rejection anyway Email this Content In May 2015, the plaintiff authorized her law firm to represent her in making a voluntary disclosure of her Swiss assets, and in the summer and fall of 2015, various documents were collected and organized to this end. ...

26 November 2018- 2:04am Louie – Tax Court of Canada places a temporal limitation on the advantages considered to arise from TFSA swap transactions Email this Content From May 15 to October 17, 2009, the taxpayer directed 71 “swaps” under which TSX-listed shares were transferred between her self-directed TFSA and her taxable trading account at a discount brokerage (“TDW”), or between her TFSA and her self-directed registered retirement savings plan (also with TDW). ...

The CRA auditor had considered such documents (which he had placed in the file) but had not relied on them in auditing the taxpayer. ... CRA had relied on the GAAR Committee’s analysis of a similar case in deciding to assess the taxpayer under GAAR, so that a GAAR Committee review of the taxpayer’s transactions was considered unnecessary. After noting that “[i]f the GAAR Committee had considered the Appellant’s case, there is no doubt that the Appellant would be entitled to discovery of all non‑privileged documents considered by the GAAR Committee in deciding to assess the Appellant under the GAAR,” Owen J stated: [T]he Appellant is equally entitled to all non-privileged documents considered by the GAAR Committee in deciding to assess under the GAAR the unrelated taxpayer described in the Similar Case … because that decision directly resulted in the subsequent decision to assess the Appellant under the GAAR. ...

31 October 2023- 10:51pm CRA revises its tests for determining the location of the employer establishment to which the employee reports in the context of remote work Email this Content Regarding the determination of the location of the establishment of the employer for purposes of applying source deductions pursuant to Reg. 102(1), effective January 1, 2024 CRA’s policy will be that an employee will be considered to report for work at an establishment of the employer if: Where a “full-time remote work agreement” is in place, the employee can be reasonably considered “attached to an establishment of the employer”; or The employee physically reports for work at the establishment, which can include a temporary establishment such as a construction site (but not generally an employee home office) and with there now being no minimum amount of time for this test to be engaged [see previously, 2015-0620821I7]. ... The primary indicator to determine if an employee can reasonably be considered "attached to an establishment of the employer" is whether the employee would physically come to work to carry out duties at that establishment, were it not for the full-time remote work agreement. Furthermore, for employees who physically reported to an establishment of the employer immediately before entering into a full-time remote work agreement, that establishment is considered to be the one to which they would be reasonably considered to be attached, unless the employees' circumstances or the nature of their duties have changed. ...

A research organization is considered to be a research body “of” the university if it is owned and controlled by the university. The university is considered to “own” the assets for this purpose in various circumstances including if it is entitled to receive those assets on the winding-up of the body. The university is considered to control if it appoints a majority of the members of the governing body (even if such nominees come from other sectors such as the private sector or the federal government). ...

11 September 2019- 11:37pm CRA finds that a corporate partner carries on the business of the partnership for TOSI (and other) purposes Email this Content CRA considers that (at least in the common law provinces) each partner of a partnership should be considered to carry on the business of the partnership. Accordingly, where an inactive spouse holds 10% (by votes and value) of a Partnerco of a partnership carrying on an active non-services partnership, the Partnerco will be considered to carry on directly the “related business” (i.e., the business of the partnership), so that the test to this effect in the “related share” definition in s. 120.4(1) will be considered to be satisfied. ...

On the other hand, a limited partner which is a UK pension fund with a greater than 10% LP interest will not be considered to satisfy the requirement in Art. 10, para. 3 that it “not own directly or indirectly” more than 10% of the capital of Canco. Although CRA recognizes that, under the partnership law, the pension fund would not be considered to own a particular percentage of the Canco shares of the UK LP, in its view the “own…indirectly” Treaty wording overcomes this obstacle. ... In this regard, CRA accepted a submission that referred to the statement in Folio S1-F5-C1 that “when a partner is not in a position to control a partnership…that…partner is dealing at arm's length with the partnership,” and reasoned that a partner who is considered to be dealing at arm’s length with a partnership should also be considered to be dealing at arm’s length with the corporation controlled by the partnership. ...

13 July 2020- 11:39pm CRA indicates that a CCPC can generate active business income from its trading in securities Email this Content In confirming that the profitable trading of securities by a corporation, that constituted a trading business under the general criteria in IT-479R, would generally give rise to active business income, CRA stated: In such a situation, the “principal purpose” of the trading business would generally not be to derive income from property and it would not be considered to be a “specified investment business.” As a result, the trading business may be considered an “active business” and any gains or losses from the trading business, as well as any interest or dividend income pertaining to or incident to that business, may be considered “income of the corporation for the year from an active business” under subsection 125(7) … [and] the corporation could be entitled to the small business deduction. ...

CRA has considered that s. 251(5)(b)(i) could apply to a beneficiary of a trust unless, under the terms of the trust agreement, the beneficiary could never obtain ownership of the shares or control the voting rights attached to the shares. ... In order for various beneficiaries of a trust, for example, a mutual fund trust which might be subject to a loss restriction event, to be considered to be a majority-interest group of beneficiaries, they must inter alia constitute a group. ... A common identifying feature (such as being non-residents, as in Silicon Graphics) is insufficient to establish such a connection. 2) The common connection might include but is not limited to a voting agreement, an agreement to act in concert, or a business or family relationship. 3) Beneficiaries may share a mutually beneficial objective, such as maximizing the value of their investments in the trust, without being considered a group. 4) Beneficiaries can participate in modern corporate or commercial steps, such as granting a proxy or participating in a reorganization of the trust (for example, a fund merger pursuant to section 132.2), without being considered a group. 5) Whether the beneficiaries know, can identify, or communicate with each other is relevant in determining whether they are a group. ...