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CRA indicated that where X settles a trust and then, some years later, contributes (to use a neutral word) further property to the trust, s. 268 will be considered to apply to that subsequent property contribution. ...

4 October 2018- 12:06am CRA suspends its proposal to impose advantage tax, where RRSP or TFSA fees are paid by the annuitant or holder, pending a Finance review Email this Content In 29 November 2016 CTF Roundtable Q. 5, 2016-0670801C6, CRA indicated that the payment of fees for investment management of an RRSP, RRIF or TFSA by the plan annuitant or holder typically would now be considered as an “advantage” giving rise to tax under s. 207.05(1) equal to 100% of the fee amount (noting inter alia under the hypothetical arm’s length test in s. 207.01(1) – advantage- (b)(i) that it would not be “commercially reasonable for an arm’s length party to gratuitously pay the expenses of another party”)- but that it would defer applying this new position until January 1, 2018 (subsequently extended by 2017-0722391E5 to January 1, 2019). ...

CRA was essentially asked to confirm the proposition that a Canadian-controlled private corporation that employed six full-time employees in its rental operations (so that it thus did not carry on a specified investment business) will therefore qualify as carrying on an active business for purposes of s. 125(1) rather than being considered to earn income from property. ...

However, it noted that in the circumstances described in 2015-0613821C6 it could give rulings on the application of the s. 55(2.1)(b) purpose test, and then stated: Although in certain circumstances the dividend paid by Opco to the holding corporation of the active shareholder may not be considered to have any of the purposes described in paragraph 55(2.1)(b), that determination can only be made after a review of all the facts of a particular situation. ...

6 November 2018- 11:39pm CRA has been applying s. 15(2) in its audits of cross-border cash pooling arrangements Email this Content In its audits of cross-border cash pooling arrangements, CRA has taken the position that: amounts received by a related non-resident head account holder in a cash pool from a Canadian entity member of the cash pool (as part of a cash pooling arrangement) are subject to the shareholder loan rules in subsection 15(2) of the Act the ordinary business and bona fide arrangement exception [in s. 15(2.3)} is generally not met because: there is a lack of evidence that a Canadian entity loans money to either arm’s length parties or other members in the corporate group … the terms of cash pooling deposit agreements do not generally include a fixed or specific date for the foreign company to repay the loan … [indicating no] bona fide arrangement for repayment the repayments exception [in s. 15(2.6)] is generally not met because the automatic daily cash sweeps are considered to form part of a series of loans or other transactions and repayments …each loan requires a separate [PLOI] election, so if the election is filed late, there can be multiple late filing penalties there will be no refund [under s. 227(6.1)] of the withholding tax paid on the amount of a loan deemed to be a dividend when the loan is repaid if the repayment is part of a series of loans and repayments Neal Armstrong. ...

(emphasis added) More generally, CRA stated that it “does not intend to generally substitute its judgment of what would be considered a reasonable amount where the taxpayers have made a good faith attempt to do so.” ...

In 2017-0735771I7 and 2018-0745501C6, the Directorate considered that s. 40(3.5)(c)(i) so applies if the CFA is wound-up on a rollover basis under s. 95(2)(e) or s. 88(3) into a parent. ...

CRA might have considered the domestic exemption not to be available because a partnership is treated as a person for such purposes under s. 212(13.1)(c), and the four partnerships likely dealt in concert respecting their joint Canco investment. ...

In commenting further on the RPE concept, CRA stated that: [A] work location may be considered to be a RPE for an employee even though the employee may only report to work at that particular location on a periodic basis (e.g., once or twice a month) during the year. ...

Bhat J appeared to find (somewhat at odds with his finding above) that the Indian subsidiary was also an agency PE of the non-resident GE companies given that it was considered through its Indian employees or (somehow) the expatriates to have an extensive involvement in the negotiation of the contracts. ...