Cases
Kufsky v. Canada, 2022 FCA 66
A shareholder loan balance that was owing by the taxpayer was eliminated through dividend declarations backdated to the three preceding years and...
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| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | per majority, taxpayer estopped from arguing that she had not received a dividend when she had already pocketed at tax benefit from submitting the contrary | 552 |
| Tax Topics - General Concepts - Fair Market Value - Other | property transfer amount not determined net of income taxes | 76 |
| Tax Topics - General Concepts - Estoppel | a taxpayer received dividends for s. 160 purposes where she was estopped from arguing otherwise or because the corporate insolvency did not matter | 307 |
| Tax Topics - General Concepts - Onus | prima facie case requires a balance of probabilities | 237 |
| Tax Topics - General Concepts - Payment & Receipt | dividend was paid by way of retroactive set-off against shareholder loan account | 174 |
Canada v. Raposo, 2019 FCA 208
The taxpayer and the three other members of the “Raposo clan” were involved in the sale of cocaine in the Gatineau area. The taxpayer...
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| Tax Topics - Statutory Interpretation - Interpretation Act - Section 8.1 | presumption of complementarity in s. 8.1 must be overridden by expansive wording in the ETA provision in question | 296 |
| Tax Topics - Excise Tax Act - Section 272.1 - Subsection 272.1(5) | s. 272.1(5) did not apply to debt of a partnership that was void for carrying on an illicit activity | 332 |
| Tax Topics - Income Tax Act - Section 96 | Civil Code and common law elements of partnership are similar | 96 |
Le Groupe PPP Ltée v. The Queen, 2017 TCC 2, briefly aff'd 2018 FCA 123
A Quebec company (“PPP”) through car dealers offered motor vehicle replacement “warranties,” which, in the event of the loss of the...
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| Tax Topics - Excise Tax Act - Section 175.1 | “warranties” funding the incremental cost of a new vehicle after complete loss of old vehicle likely were insurance policies and were not re quality, fitness or performance | 345 |
| Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) | payer of auto “warranty” claim did not benefit from the auto supply | 277 |
Durocher v. Canada, 2016 FCA 299
A financial institution, which was controlled by a non-resident, acquired an option to subscribe at a future date for the majority of the equity...
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| Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) | option valid notwthstanding that its exercise in full by holder would be illegal | 333 |
| Tax Topics - Statutory Interpretation - Interpretation Act - Section 8.1 | Tax Court can review validity of contract in reviewing assessment | 137 |
Hôpital Santa Cabrini v. Canada, 2016 FCA 207
The appellant (the “Hospital”), which had a shortage of nurses on staff and contracted with three independent personnel-services agencies (the...
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| Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 6 | a hospital which contracted for the services of nurses employed by a personnel-services agency was receiving a taxable supply | 231 |
| Tax Topics - Income Tax Act - Section 180 - Subsection 180(3) | contractual interpretation question subject to Housen standard | 60 |
Livent Inc. v. Deloitte & Touche, 128 OR (3d) 225, 2016 ONCA 11, rev'd in part 2017 SCC 63
Deloitte was unsuccessful in arguing that it was not liable to the receiver for a public company (Livent), for failure to detect the fraudulent...
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| Tax Topics - General Concepts - Negligence, Fiduciary Duty and Fault | auditors liable for failure to detect the company’s own fraud effected through its senior management | 245 |
Hedges v. Canada, 2016 FCA 19
The zero-rating of controlled drugs in Sched. VI, Part I, s. 2(d) would apply to dried marihuana if it is viewed as a drug which may only be sold...
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| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part I - Section 2 | authorizations to possess marihuana were not sale exemptions | 232 |
| Tax Topics - Statutory Interpretation - Headings | heading did not contemplate illegal drugs | 100 |
Envision Credit Union v. Canada, 2013 DTC 5144 [at at 6275], 2013 SCC 48, [2013] 3 S.C.R. 191
The taxpayer ("Envision") was formed on the amalgamation under the Credit Union Incorporation Act (B.C.) (the "CUIA") of two credit unions. S....
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| Tax Topics - General Concepts - Separate Existence | shareholders do not own the corporation's assets | 135 |
| Tax Topics - Income Tax Act - Section 87 - Subsection 87(1) | all predecessors' property became Amalco property, and purported conveyance of only some of their property to Amalco was legally impossible | 415 |
Richstone v. MNR, 72 DTC 6232, [1972] CTC 265 (FCTD), briefly aff'd 74 DTC 6129 (FCA)
In rejecting an argument that a payment for a non-compete covenant was not taxable under what now is s. 6(3)(d) because the covenant was...
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| Tax Topics - Income Tax Act - Section 6 - Subsection 6(3) - Paragraph 6(3)(e) | 72 | |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(3) | 210 |
Continental Bank Leasing Corp. v. Canada, 98 DTC 6505, [1998] 2 S.C.R. 298, [1998] 4 CTC 119
There was no dispute that the participation by the taxpayer, as a partner, in a partnership for a four-day period resulted in a breach by its...
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| Tax Topics - General Concepts - Substance | question of constructing the genuinely-reflective documents | 204 |
| Tax Topics - Income Tax Act - Section 96 | 5 day partnership with tax motivation | 165 |
| Tax Topics - General Concepts - Purpose/Intention | ancillary profit-producing and sharing intention was sufficient to establish partnership | 47 |
Bow River Pipe Lines Ltd. v. R., 97 DTC 5385, [1997] 3 C.T.C. 397 (FCA)
A wholly-owned subsidiary ("Lone Rock") of the taxpayer held a 99.9% limited partnership interest in a partnership between Lone Rock and a...
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| Tax Topics - General Concepts - Transitional Provisions and Policies | 64 | |
| Tax Topics - Income Tax Act - Section 96 | mere assignee of partnership interest was not a partner | 195 |
Cooper v. The Queen, 88 DTC 6525, [1989] 1 CTC 66 (FCTD)
In finding that the making of an interest-free loan by executors in breach of their duties under provincial law did not give rise to a benefit to...
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| Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1) | interest-free loan recognized as obligation rather than benefit | 103 |
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | interest-free loan | 114 |
Curlett v. MNR, 61 DTC 1210 (Ex Ct), briefly aff'd 62 DTC 1320, [1967] CTC 62, [1967] S.C.R. 280
The taxpayer regularly made mortgage loans at a discount and then sold them for their face amount to his company. In dealing with a submission...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Debt/ receivables | 52 |
See Also
Fiducie Historia v. The King, 2024 CCI 76
A discretionary family trust, whose beneficiaries included the family patriarch (LR) and his two sons (the Rémillard Brothers), was a shareholder...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) - Paragraph 104(6)(b) | trust distributions were lawful and deductible even though on paper the trustees had improperly delegated their powers | 554 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(24) | amounts that in fact had been paid were not deemed to have been payable notwithstanding any illegality | 152 |
Raposo v. The Queen, 2018 TCC 81, aff'd 2019 CAF 208
The taxpayer and the three other members of the “Raposo clan” were involved in the sale of cocaine in the Gatineau area. The Crown took the...
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| Tax Topics - Excise Tax Act - Section 272.1 - Subsection 272.1(5) | alleged partnership was void as having an illegal purpose contrary to public policy | 153 |
| Tax Topics - Income Tax Act - Section 96 | illegality of partnership business voided the partnership | 137 |
Uber Canada Inc. v. ARQ, 2016 QCCS 2158, aff'd 2016 QCCA 1303
The ARQ obtained a search warrant for searching an Uber Canada office in Montreal. In order to be granted the search warrant, the ARQ employee...
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| Tax Topics - Excise Tax Act - Section 240 - Subsection 240(1.1) | Uber drivers, as operators of “taxi” businesses, likely were required to register for QST | 284 |
| Tax Topics - Income Tax Act - Section 231.3 - Subsection 231.3(3) | it was reasonable for ARQ on a search to seize smart phones and laptops to make subsequent complete copies | 440 |
| Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 | seizure of computers containing personal information was the only practicable approach | 142 |
Durocher v. The Queen, 2016 DTC 1013 [at 2584], 2015 TCC 297, aff'd 2016 CFA 299
A financial institution, which was controlled by a non-resident, acquired an option to subscribe at a future date for the majority of the equity...
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Canadian-Controlled Private Corporation | potential illegality of an option to acquire control of a private corporation did not nullify the option, so that the corporation was not a CCPC | 447 |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | potential illegality of 3rd-party option to acquire control of a subsidiary corporation did not nullify the option, so that the subsidiary was not a CCPC | 201 |
McLarty v. The Queen, 2014 DTC 1162 [at 3556], 2014 TCC 30
On December 31, 1993, the taxpayer and 21 other signatories to a joint venture acquired rights to exploit seismic data. Under the terms of the...
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| Tax Topics - General Concepts - Agency | participations contrary to agreement were disregarded | 111 |
| Tax Topics - General Concepts - Sham | sham cannot apply to just part of transaction | 145 |
| Tax Topics - General Concepts - Tax Avoidance | sham cannot apply to just part of transaction | 145 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | revenues 10% of interest | 186 |
| Tax Topics - Income Tax Act - Section 67 | leveraged purchase of seismic data at arm's length was presumptively reasonable | 296 |
Coicou v. M.N.R., 2008 TCC 628
Archambault J relied on Art. 1413 of the Civil Code was relied upon to find that Quebec employment contracts with immigrants without the legal...
Richter & Associates Inc v. The Queen, 2005 TCC 92
In rejecting a submission that the trustee for a bankrupt company was not authorized by the Bankruptcy and Insolvency Act to engage in a...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business | litigation support services provided by trustee for bankrupt financial institution were an "undertaking" | 289 |
| Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(2) | allocation between costs incurred by trustee in bankruptcy for bankrupt financial institution to provide litigation services to creditors, and costs incurred in connection with its action qua trustee | 392 |
| Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(5) | allocation between own suit and litigation support | 77 |
| Tax Topics - Excise Tax Act - Section 141.1 - Subsection 141.1(3) - Paragraph 141.1(3)(b) | action brought by trustee for bankrupt financial institution deemed to be not in course of commercial activity | 200 |
| Tax Topics - Excise Tax Act - Section 265 - Subsection 265(1) - Paragraph 265(1)(f) | trustee's own suit and litigation support activity were related | 295 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | litigation support services provided by trustee for bankrupt financial institution were an "undertaking" | 286 |
Canada v. Libra Transport (BC) Ltd., [2001] GSTC 57, aff’d 2002 FCA 347
In the course of finding that a trucking comapny was providing insurance to trucking operators as agent rather than on its own account, Bowie J...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply | trucker presumed not to be an unlicensed insurer | 242 |
| Tax Topics - General Concepts - Agency | trucker presumed not to be an unlicensed insurer | 187 |
Wallsten v. The Queen, 2001 DTC 215 (TCC) (Informal Procedure)
The taxpayer entered into a contract with Sun Life to provide sales services as an independent contractor. The taxpayer then agreed with a company...
Bernier v. The Queen, 97 DTC 317, [1997] 1 CTC 2028 (TCC)
The taxpayer's employer issued employee stock options to the taxpayer and others. Later in the same year, the Quebec Securities Commission...
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| Tax Topics - Income Tax Act - 101-110 - Section 110 - Subsection 110(1) - Paragraph 110(1)(d) | 125 |
Cox v. The Queen, 96 DTC 1690 (TCC)
The fact that a transfer of property from the taxpayer's spouse to the taxpayer was void against the trustee in bankruptcy of the spouse did not...
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| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | 64 |
Lemoine v. The Queen, 96 DTC 1655 (TCC)
A loan made by a corporation to its individual shareholder was subject to s. 15(2) notwithstanding that the Companies Act (Quebec) prohibited a...
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| Tax Topics - Income Tax Act - Section 15 - Subsection 15(2) | 82 |
Samuel Wuslich v. Minister of National Revenue, 91 DTC 704, [1991] 1 CTC 2473 (TCC)
Because the Province of Saskatchewan did not permit the taxpayer to carry on the practice of orthodontics through a corporation, income which his...
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| Tax Topics - Treaties - Income Tax Conventions - Article 7 | 99 |
Administrative Policy
1 November 2016 Internal T.I. 2016-0663971I7 - 104(6)(b), whether amount became payable
A family trust paid income to the minor children in breach of a prohibition in the trust deed against making distributions to designated...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(24) | income that is paid to a minor beneficiary in contravention of the trust deed is non-deductible under s. 104(6) | 190 |
| Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1) | income distributions to minor beneficiaries contrary to trust deed included under s. 105(1) | 151 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | prohibited distribution from trust | 76 |
9 November 2001 External T.I. 2001-0092495 - CTF ROUND TABLE-PROFESSIONAL CORPs
Notwithstanding the Wallsten decision, the CCRA will not accept that insurance agents or realtors can transfer their commission income to a...
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| Tax Topics - General Concepts - Tax Avoidance | 37 |
17 October 2011 External T.I. 2011-0423361E5 F - Loi sur le courtage immobilier
The Quebec Real Estate Brokerage Act (the “REBA”) requires that a real estate or mortgage broker carrying on brokerage activities on behalf of...
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| Tax Topics - Income Tax Act - Section 9 - Nature of Income | Quebec real estate broker can generate commissions in a controlled corporation | 90 |
14 May 2002 External T.I. 2001-0105925 F - TOTALITE DES ACTIFS DE L'ENTREPRISE
A pharmacist transferred all the assets of his pharmaceutical business, including inventories of pharmaceuticals, but excluding goodwill, to a...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(f) - Subparagraph 110.6(14)(f)(ii) - Clause 110.6(14)(f)(ii)(A) | unclear whether pharmaceuticals inventory could be transferred to a corporation owned by a pharmacist | 331 |
10 May 2001 Internal T.I. 2001-0065697 F - SOCIÉTÉ EXERCANT UNE PROFESSION LIBERALE
The Directorate referred inter alia to Wuslich as authority for its position in IT-189R2, para. 2 that:
If provincial law or the regulatory body...
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| Tax Topics - Income Tax Act - Section 9 - Nature of Income | income earned by a professional corporation contrary to the professional rules is personal income of the professional | 66 |
3 April 1996 Internal T.I. 9522931I7 - RELEASE SURRENDER DISCLAIMER - INCOME INTEREST
Respecting a spousal trust that was not formally varied before assets were distributed to non-spousal beneficiaries, the Directorate indicated...
21 March 1991 Memorandum (Tax Window, No. 1, p. 14, ¶1162)
Fishing income was earned by corporations to which fishermen had leased their fishing licences, rather than by the fishermen personally,...
31 May 1990 T.I. (October 1990 Access Letter, ¶1489)
RC generally would be reluctant to give its assent to a transaction prohibited by the Quebec Companies Act.
Articles
Marshall Haughey, "Issuing Shares for a Promissory Note", 24 Can. Current Tax, May 2014, p. 85.
Prohibition by jurisdiction (pp. 85-6)
[I]n Saskatchewan, Manitoba, New Brunswick, and Newfoundland…a promissory note cannot be given as...
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| Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Paid-Up Capital | 664 |