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Topic Descriptor 27 October 2020 CTF Roundtable Q. 1, 2020-0860991C6- ACB increase due to misalignment of ACB Income Tax Act- Section 55- Subsection 55(2.1)- Paragraph 55(2.1)(b) GAAR may apply to spin-offs that effect a disproportionate distribution of high basis assets to the Spinco Income Tax Act- Section 245- Subsection 245(4) duplication of ACB is abusive 27 October 2020 CTF Roundtable Q. 2, 2020-0861001C6- Consolidation of safe income in a corporate group Income Tax Act- Section 55- Subsection 55(2.1)- Paragraph 55(2.1)(c) there potentially can be a safe income pick-up from a corporation over which there is no significant influence 27 October 2020 CTF Roundtable Q. 3, 2020-0861031C6- Safe income on reorganization Income Tax Act- Section 55- Subsection 55(2.1)- Paragraph 55(2.1)(c) a spinner corporation is expected to ensure that sufficient tax basis in its shares is transferred to the shares of spinco that also is receiving safe-income rich spin assets 27 October 2020 CTF Roundtable Q. 4, 2020-0862451C6- Sale of TCP by a partnership Income Tax Act- Section 116- Subsection 116(5) the s. 116 certificate limit and the purchase price can coincide even where the vendor partnership has resident partners 27 October 2020 CTF Roundtable Q. 5, 2020-0864281C6- Article IV:6 of the Canada-US Treaty Treaties- Income Tax Conventions- Article 10 choice between application of France and US Convention to dividends paid by Canco at bottom of multi-tier structure Treaties- Income Tax Conventions- Article 4 where Canco is held by fiscally transparent Franceco, which is held by LP with only some US partners, there is a choice as to which Treaty to apply 27 October 2020 CTF Roundtable Q. 6, 2020-0862471C6- MLI and Principal Purpose Test Treaties- Multilateral Instrument- Article 7- Article 7(1) CRA will be guided by the OECD examples in applying the PPT 27 October 2020 CTF Roundtable Q. 7, 2020-0861041C6- CTF Question 7- Subsection 105(1) Income Tax Act- 101-110- Section 105- Subsection 105(1) generally no taxable benefit for beneficiary’s rent-free use of personal-use property of the trust Income Tax Act- Section 73- Subsection 73(1.01)- Paragraph 73(1.01)(c) use by the children of the cottage held in an alter ego or joint spousal trust is not permitted 27 October 2020 CTF Roundtable Q. 8, 2020-0861061C6- SDA and Formula-Based Plans Income Tax Act- Section 248- Subsection 248(1)- Salary Deferral Arrangement formula-based appreciation plans are not SDAs where the formula closely tracks the FMV of the employer’s shares over the plan’s duration 27 October 2020 CTF Roundtable Q. 9, 2020-0866671C6- entity classification of UK LLP Income Tax Act- Section 96 UK LLP has the attributes of a corporation rather than a partnership Income Tax Act- Section 248- Subsection 248(1)- Corporation a UK LLP is a corporation in light of its separate legal personality and sole responsibility for debts and conduct of business 27 October 2020 CTF Roundtable Q. 10, 2020-0860961C6- Refreeze and 74.4(2) Income Tax Act- Section 74.4- Subsection 74.4(3) a refreeze does not reduce the outstanding amount Income Tax Act- Section 74.4- Subsection 74.4(2) a refreeze does not reduce the quantum of any imputed interest under s. 74.4(2) 27 October 2020 CTF Roundtable Q. 11, 2020-0860981C6- Refinancing Prescribed Rate Loans Income Tax Act- Section 74.5- Subsection 74.5(2) fresh prescribed rate loan could be made immediately after repayment of 1st such loan out of sale proceeds Income Tax Act- Section 74.1- Subsection 74.1(3) a 1% prescribed-rate loan can effectively replace a 2% loan if the latter loan is repaid with sales proceeds 27 October 2020 CTF Roundtable Q. 12, 2020-0862501C6- COVID-19 and Prior APAs/Current MAPs Income Tax Act- Section 247- New- Subsection 247(2) CRA will assess the COVID impact on APAs on a case-by-case basis 27 October 2020 CTF Roundtable Q. 13, 2020-0861021C6- Reimbursement of Equipment Income Tax Act- Section 6- Subsection 6(1)- Paragraph 6(1)(a) CRA extends the COVID $500 safe harbor re employer reimbursement of home office computers to other home office items 27 October 2020 CTF Roundtable Q. 14, 2020-0860971C6- Section 86 Reorganization of Capital Income Tax Act- Section 86- Subsection 86(1) a s. 86 reorg normally requires the filing of articles of amendment ...

10 July 2013- 9:52am LLCs owned by US-resident individuals are not entitled to the 5% branch profits rate Email this Content CRA also has published its response at the 2010 annual CTF conference indicating that the branch tax reduction under X(6) of the Canada-US Tax Convention is not available to an LLC that is wholly-owned by US-resident individuals. ...

Krauze, "Impact of Cloud Computing on Permanent Establishments Under the OECD Model Tax Convention," Tax Management International Journal, Vol. 44, No. 3, March 13, 2015, p. 131 under Treaties – Art. 5, Art. 9. ...

24 October 2012- 10:31am CRA characterizes referral fees as royalties rather than business profits Email this Content CRA considers that customer referral fees paid by a Canadian insurance broker to a US insurance broker likely should be characterized as payments for "information concerning... commercial... experience," so that the withholding tax that otherwise would apply under s. 212(1)(d)(ii) will be relieved by the Royalties Article of the Canada-US Income Tax Convention. ...

Tax Convention.  This reasoning probably applies to other penalties that are not imposed under the Internal Revenue Code. ...

29 May 2016- 12:01am CRA continues to not accept the deduction of notional expenses from the profits of PEs of (non-U.S.) non-residents Email this Content Notwithstanding a somewhat revised OECD approach, CRA continues to consider (in light of Cudd Pressure and s. 4(b) of the Income Tax Conventions Interpretations Act) that notional expenses are not deductible in computing the profits attributable to a Canadian permanent establishment for Treaty purposes – with the exception of PEs of qualifying U.S. residents, as to which there is an overriding agreement with the U.S. competent authority. ...

Summary of  OECD Discussion Draft, Working Party 1 "OECD Model Tax Convention: Tax Treatment of Termination Payments" under Treaties – Art. 15. ...

CRA accepted that Canco's payments to Pubco would be exempted from withholding tax by the Canada-US Income Tax Convention by virtue of being patent/know-how licence payments, other than payments for know-how provided under a "franchise" (a broad term- see Investors Group.) ...

Convention on its share of Canadian branch profits of a U.S. partnership that has elected to be a domestic corporation for Code purposes, if those profits qualify as connected to a substantial U.S. active business under Art. ...

GILTI Tax Treaties- Income Tax Conventions- Article 29 Treaty does not fetter the right of the US to impose GILTI tax with reference to Canadian subs’ income Treaties- Income Tax Conventions- Article 26 Cdn competent authority will not recognize claims that GILTI tax is contrary to Art. ...