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Headquarters also noted that for s. 162(7) penalty purposes, “an information return that is missing substantial information will be considered invalid and, therefore, will not be considered to have been filed.” ...

9 March 2020- 12:41am CRA indicates that a gross negligence penalty generally should not apply to a genuine misinterpretation of the ETA Email this Content Respecting whether the ETA gross negligence applied where there has been a failure to report taxable revenue, CRA indicated that “Usually, gross negligence penalties are not assessed where it is considered that there was a genuine misinterpretation of the ETA on the part of the registrant and it is reasonable to assume that the registrant did not know whether a particular supply was a taxable supply” and that “Generally speaking, no penalty will be assessed where it appears that the registrant was confused about the reporting of an amount and it is the first time a penalty is being considered.” ...

CRA considered that on this basis “a disposition of an interest in a related segregated fund trust will generally result in capital gains treatment” so that “the interest may be considered a capital property, and accordingly, an eligible property under paragraph 85(1.1)(a) of the Act for purposes of subsection 85(1).” ...

CRA indicated (perhaps based on Deltona) that where two corporations are amalgamated in Canada, the amalgamated corporation is considered to have been incorporated in Canada. Although a Canadian corporation that is continued outside Canada will not thereafter be considered to have been incorporated in Canada, it will nonetheless be resident in Canada if its central management and control is in Canada- and it will be deemed under s. 132(2) to be resident in Canada in respect of activities carried on by it through any Canadian permanent establishment. ...

CRA responded that length of stays, and the nature of the activities, of the individual in each jurisdiction would have to be considered, to determine whether the individual usually lives in one state as compared to the other, and that the relevance of particular lengths of time would need to be considered in the circumstances: no set periods of time were applied as tests. ...

14 March 2023- 11:03pm CRA confirms that there are no ITCs for appliances acquired during the construction of a rental residential complex Email this Content CRA confirmed that since appliances and common area furniture and equipment that are acquired in connection with the construction of, say, a residential complex such as an apartment building and which do not become fixtures, will be considered to have been acquired for the purpose of the intended exempt rental of the completed units, no input tax credits will be available. ... CRA also summarized the tests it considered should be applied in determining whether, at common law, personal property has become a fixture. ...

Regarding whether the compensation payment was currently deductible, CRA indicated that this was a question of fact on which it could not conclude, but nonetheless suggested: [I]n a context where the landlord pays compensation to his tenant because of his obligations under the Civil Code of Québec, this element could then be considered dominant and the compensation could be considered a current expense. ...

Regarding the synergy tax credit for Québec businesses ("CSEQ") provided under s. 776.1.38 of the Taxation Act, CRA considered that this time occurred (upon the taxpayer having made the claim in prescribed form) on the due date for the return for the year, assuming that the credit claimed did not exceed the maximum claim limit. To the extent this claim limit applied, CRA considered that the entitlement arose when the taxpayer filed a request to carry back or carry forward the amount to another taxation year. ...

5 March 2025- 10:42pm CRA indicates that the processing of fuel could constitute “processing” for ITC and Class 29 purposes Email this Content Whether equipment acquired by the taxpayer qualified for the Atlantic investment tax credit (AITC) turned, in part, on whether its use in the production or processing of fuel could be considered to be the manufacturing or processing of goods for sale in the context of the description of a Class 29 property (and as required by the definition of “qualified property” in s. 127(9).) After referring to the meaning accorded to “processing” in Tenneco and Repsol, CRA stated that “in our view the production or processing of a fuel could be considered to be the manufacturing or processing of a good for sale for purposes of the AITC depending on the particular circumstances.” ...

Treaty having regard to the requirements thereunder that the deemed dividend amount be considered under U.S. tax law to have been derived by Parentco through Sisterco LLC and Parentco LLC and that by reason of those LLCs being fiscally transparent, the U.S. treatment of such amount was the same as its treatment would be had it been derived directly by Parentco. CRA considered that even if there was no adjustment in the U.S. pursuant to competent authority proceedings, this test would be satisfied given that from a US tax perspective, Parentco would have a reduced cost of the inventory considered, from that perspective, to have been purchased by it directly from Canco, so that the s. 247(12) deemed dividend corresponded to income (i.e., inventory profit) generated by Parentco. ...