Cases
Canada v. Prévost Car Inc., 2009 DTC 5721, 2009 FCA 57
The taxpayer paid dividends to its shareholder, ("Prévost Holding"), a Netherlands holding company which, in turn, paid dividends in...
Hunter Douglas Ltd. v. The Queen, 79 DTC 5340, [1979] CTC 424 (FCTD)
A Canadian company shifted its central management and control to the Netherlands, thereby becoming a resident of the Netherlands for purposes of...
See Also
Husky Energy Inc. v. The King, 2023 TCC 167
Before a Canadian public corporation (“Husky”) paid a dividend on its shares, two significant shareholders of Husky resident in Barbados (the...
RMM Canadian Enterprises Inc. v. R., 97 DTC 302, [1998] 1 C.T.C. 2300 (TCC)
After finding that sale proceeds was deemed to be a dividend by s. 84(2), Bowman TCJ. went on to find that this deemed dividend was a dividend for...
Specialty Manufacturing Ltd. v. R., 97 DTC 1511, [1998] 1 CTC 2095 (TCC)
Article IX of the 1980 Canada-U.S. Convention and Article IV of the 1942 Canada-U.S. Convention did not prevent the application of s. 18(4) of the...
Administrative Policy
15 May 2024 IFA Roundtable Q. 7, 2024-1007641C6 - Principal Purpose Test in the Multilateral Instrument
CRA was asked how the principal purpose test (PPT) in Art. 7(1) of the MLI) would apply in the situation where:
Canco is wholly-owned by a Foreign...
15 May 2024 IFA Roundtable Q. 1, 2024-1007651C6 - Principal purpose test and the UK-Canada Tax Treaty
A UK-resident corporation increased its voting shareholding of Canco the day before a dividend was paid so as to hold 10% of the shares. How would...
21 October 2021 Internal T.I. 2020-0872281I7 - S.219 and Article X(6) of the Canada-US Treaty
The Directorate confirmed the position in 9408985 that in light of the branch profits limitation under Ar. X(6) of the Canada-US Treaty of 10% of...
14 December 2023 External T.I. 2019-0820291E5 - Meaning of "Capital"
The 1,000 common shares of Canco (a Canadian-resident corporation), which had an aggregate fair market value (FMV) and stated capital of $1,000...
16 June 2020 Internal T.I. 2019-0792651I7 - 10(8) of the Canada-UK Tax Treaty
Art, 10(8) of the Canada-U.K. Convention provides:
The provisions of this Article shall not apply if it was the main purpose or one of the main...
2024 Ruling 2019-0817961R3 - Swiss Collective Investment Scheme
Background/ structure
A collective investment scheme (the “Fund”) established under Swiss law is an arrangement by which investors pool their...
17 May 2023 IFA Roundtable Q. 7, 2023-0964521C6 - Application of Article 10, Canada-Hong Kong
Two individuals (Mr. and Mrs. A), who had been resident in Hong Kong from before 2013, each transferred 50% of the shares of a Canadian-resident...
27 October 2020 CTF Roundtable Q. 5, 2020-0864281C6 - Article IV:6 of the Canada-US Treaty
A partnership whose partners are resident in the U.S. and in other countries with which Canada does and does not have a treaty owns a French...
18 April 2019 Internal T.I. 2018-0753621I7 - Subsection 247(12)
Parentco, a U.S.-resident, is the only member of Parentco LLC, which is the only member of Sisterco LLC, and also wholly-owns Canco. Canco resides...
4 April 2019 Internal T.I. 2017-0736531I7 - Articles IV(6) and X(6) of the Canada-US Treaty
Two U.S. corporations that were “qualifying persons” for purposes of the Canada-U.S. Treaty (USCo1 and USCo2) held 58% and 42%, respectively,...
7 September 2016 External T.I. 2014-0563781E5 - Articles 10 and 11 of Canada-UK Treaty
A UK corporation (“GP Co”) is the general partner (with a 1% interest) of a UK limited partnership which is fiscally transparent for UK...
28 May 2015 IFA Roundtable Q. 12, 2015-0581521C6 - IFA 2015 Q.12: Canada-Switzerland Treaty
A corporation resident in Switzerland ("Swissco") wholly-owns "Holdco," which wholly-owns "Canco"). S. 214(3)(a) deems Canco to pay a dividend to...
28 May 2015 IFA Roundtable Q. 2, 2015-0581551C6 - IFA 2015 Q.2: GAAR and treaty shopping
What is CRA's position on the application of the GAAR to treaty shopping arrangements? CRA stated:
The…comments on treaty shopping… made in...
11 July 2014 External T.I. 2013-0497381E5 - REIT investment in a US IRA.
An IRA account of Mr. X (who is a citizen and a resident of the US) receives a distribution on units held in a REIT as defined in s. 122.1(1). ...
31 May 2013 External T.I. 2013-0486011E5 - Loan to non-resident - Part XIII tax
A Canadian-resident corporation (CanCo1) and its wholly-owned Canadian-resident subsidiary (CanCo2) are the 99% limited partner and 1% general...
23 October 2012 External T.I. 2012-0440101E5 - Article X(6) Canada-US Treaty
A US LLC, which has two US-resident members (either two corporations or an individual and a corporation) who qualify for Treaty benefits, carries...
17 May 2012 IFA Roundtable, 2012-0444151C6 - Hybrid Partnerships and Branch Tax Liability
The two partners of a partnership which has elected to be a domestic corporation for Code purposes are: a corporation which is resident in the...
2012 Ruling 2012-0435211R3 - Article XXIX-A(3) of the Canada-US Tax Convention
Holdco, which had been a listed U.S. company, was taken private by L5, which was a fund whose members are not known. Holdco and its subsidiary,...
2012 Ruling 2011-0424211R3 - Article X(2) and 84(3) deemed dividends
All of the Class A shares of two taxable Canadian corporations ("OpCo2" and "Salesco") are owned by a corporation ("USSalesco1") which is not...
Income Tax Technical News No. 44 13 April 2011 [archived]
After commenting on a transaction in which a ULC held by a US C corporation (USco) increases its paid-up capital (giving rise to a deemed...
30 November 2010 Annual CTF Roundtable, 2010-0386391C6 - Branch Tax
In response to a query as to whether the branch tax reduction in Art. X(6) of the Canada-US Tax Convention is available to a fiscally transparent...
13 July 2009 External T.I. 2009-0318701E5 - Article X(2) and Tiered Partnerships
Where a US corporation that is a qualifying person is a 99.99% limited partner of a Delaware limited partnership which, in turn, is a 99.99%...
21 May 2009 IFA Roundtable Q. 1, 2009-0321451C6 - Meaning of beneficial owner in Article 10, 11 & 12
In the Prévost Car case, "the Court implied that where an intermediary acts as a mere conduit or funnel in respect of an item of income, the...
2007 Ruling 2007-0248021R3 - Cdn Japan Convention: withholding rate deemed div.
a dividend deemed to be received by significant Japanese corporate shareholder of a Canadian corporation under s. 84(3) on the purchase for...
2004 IFA Roundtable Q. 3, 2004-007223
Although a partner is not considered to own a specified percentage of the shares of a corporation held by a partnership, a favourable ruling was...
12 March 2003 External T.I. 2002-0176955 F - Retenu dividende français
CCRA indicated, regarding whether a dividend paid by a French corporation to a Canadian mutual fund trust or Canadian pension fund would be...
17 December 2002 External T.I. 2002-0155005 - FTC for U.K. Dividends
Following the repeal of U.K. ACT in 1999, paragraph 3 of the Canada-U.K. Convention continues to apply since individuals in the United Kingdom are...
18 March 2002 External T.I. 2002-0120065 F - Avoir fiscal français - 20(11)
A Canadian-resident received a $10,000 dividend from a French company as reduced by French withholding tax of 15% ($1,500) and by the 50% avoir...
30 January 2002 External T.I. 2001-0106695 - Subs. 219(5.3);Article X of Canada-US Treaty
A deemed dividend under s. 219(5.3) of the Act will be treated as a dividend governed by Article X, paragraph 2 of the Canada-U.S. Convention,...
8 January 1996 External T.I. 9428025 - RETURN OF CAPITAL FROM A DELAWARE CORPORATION
Because the purpose of the "source country deemed dividend rule" in the definition of "dividend" in paragraph 3 of Article X of the Canada-U.S....
4 March 1993 Memorandum (Tax Window, No. 30, p. 18, ¶2472)
A Canadian resident will not be entitled to a foreign tax credit or to a refund of ACT from the U.K. authorities with respect to a stock dividend...
October 1992 T.I. 921009 "Loans to Non-Residents"
Where a Canadian subsidiary issues a demand note to its U.S. parent, the deemed dividend arising under s. 214(3)(a) will be eligible for the...
3 September 1992 T.I. 920333 "Interest-Free Loans - Reason for Withholding"
The word dividend in the Canada U.S.-Convention includes deemed dividends arising under s. 214(3)(a) of the Act.
8 April 1992 T.I. (913412 (March 1993 Access Letter, p. 83, ¶C180-135; Tax Window, No. 18, p. 10, ¶1847)
Where s. 214(3)(a) imputes a shareholder benefit to U.S. resident shareholders of a U.S. corporation which allows them to use a Canadian vacation...
91 C.R. - Q.1
A U.S. corporation holding shares through a U.S. partnership will not be eligible for the 10% rate.
Articles
Peter Lee, Paul Stepak, "PE Investments in Canadian Companies", draft 2017 CTF Annual Conference paper
Application of 10%-of-voting power test where sister companies held through holding “Aggregator” LP (pp. 5, 9)
[A] PE fund limited partnership...
Elio Andrea Palmitessa, "Italian Supreme Court Applies the Beneficial Ownership Clause to Pure Holding Companies", Tax Notes International, April 17, 2017, p. 259
Dividend withholding avoidance (p. 259)
[A] U.S. corporation owned a holding company in France, which in turn owned an Italian subsidiary. In 2002...
Timothy Hughes, Matias Milet, Marc Richardson-Arnould, "Private Equity Funds – Selected Canadian Tax Issues", Tax Management International Journal, 2016, p.84
Advantages of separate fund for Canadian investors (p. 87)
A non-Canadian private equity fund that expects to have significant investor capital...
Jack Bernstein, "Canada-US Tax Traps for LLCs", Canadian Tax Highlights, Volume 22, Number 2, February 2014, p. 11
High US branch tax if use LLC (p.11)
Assume that a Canco expands into the United States and forms an LLC to be the US opco. For Canadian tax...