Words and Phrases - "paid"

a
87
b
44
c
77
d
51
e
38
f
31
g
18
h
14
i
74
j
2
k
2
l
32
m
56
n
25
o
38
p
80
q
3
r
76
s
90
t
46
u
16
v
9
w
23
y
2

20 October 2004 Internal T.I. 2004-0086501I7 F - Droits compensateurs

Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(vv)
posting of bonds for US countervailing duties did not constitute their being “paid” for s. 20(1)(vv) purposes

In 2001, the U.S. government began imposing countervailing and anti-dumping duties ("CADD") on the export of softwood lumber products from Canada, including by the Corporation, and required that the duties be paid - or that a bond be posted equivalent to such duties, which the Corporation did. Under its agreements with its lumber suppliers, the price it paid was reduced according to the applicable CADD rate that was being imposed, but it was further agreed that if the CADD was reversed, that amount would be refunded to the suppliers.

After a finding by the International Trade Tribunal that there was not a current material injury to the US lumber producers, the Corporation was released by the US government from its potential obligations regarding the CADD for the years 2001 and 2002, in 2002, it repaid an amount corresponding to the CADD in question to its suppliers.

In finding that the Corporation was not entitled to a deduction in 2001 for the CADD amounts pursuant to s. 20(1)(vv), and before going on to find that s. 18(1)(e) denied a s. 9 deduction, the Directorate stated:

Paragraph 20(1)(vv) … allows for the deduction of such duties as long as they are paid. … In the current context, [“paid’] … means "to discharge a debt". However, we understand that in this case, the guarantee offered to the US Government is more of a surety bond in which the Corporation has acquired term deposits to secure the performance of its obligations. Consequently, we are of the view that the provisions of paragraph 20(1)(vv) do not apply … .

Words and Phrases
paid
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) obligation to repay suppliers for extra US countervailing duties charge made to them was contingent until a board decision reversed such duties 341

Blais v. MNR, 92 DTC 1497 (TCC)

Summary Under
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(b)

A taxpayer was ordered in 1984 to retain arrears of alimentary allowance that had accumulated from March 1983 onward to be applied against an amount owing to him by his estranged wife. In finding that the alimentary allowance was not "paid" by him for purposes of s. 60(b), and was not "received" by her for purposes of s. 56(1)(b), Garon J. stated (p. 1499):

"... The verb 'pay' in the context of that paragraph means a transfer of money, a handing over of funds ... [and] the expression 'received' involves the idea of being put in possession of something."

Words and Phrases
paid
Locations of other summaries Wordcount
Tax Topics - General Concepts - Payment & Receipt payment references funds transfer 100
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(b) 100

4145356 Canada Limited v. The Queen, 2011 DTC 1171 [at at 937], 2011 TCC 220

Summary Under
Tax Topics - Income Tax Act - Section 126 - Subsection 126(2)

The taxpayer acquired units in a Delaware limited partnership ("Crown Point"), whose other limited partner ("Altier") and whose general partner were Bank of America subsidiaries and which had elected to be classified as a corporation for purposes of the Code. In light of the right of the taxpayer to require Altier, which was the vendor of the units, to repurchase the units, the taxpayer's purchase of those units was characterized for purposes of the Code as a secured loan, so that the$400 million purchase price for the units was treated as a loan by the taxpayer to Altier, and the partnership distributions made by Crown Point to the taxpayer were treated as deductible interest by Altier. Crown Point had made a loan of $1.6 billion to another Bank of America subsidiary, and paid US corporate income tax on the interest income thereon. The taxpayer included its share of the Crown Point income (essentially this interest income) in computing its income for purposes of the Act, and claimed a foreign tax credit under s. 126(2) based on its share of the Crown Point US corporate tax for the year. The Minister's argued that the taxpayer was ineligible for a s. 126(2) foreign tax credit on the basis that the taxpayer did not itself pay any US income tax.

Webb J. found (at para. 28) that the word "paid" did not require a corresponding liability of the payor to make the payment. Furthermore (at para. 37):

Since the income of the Appellant is its share of the income of Crown Point (from the same sources of income), in determining whether the Appellant paid foreign taxes in relation to this income, the amount of foreign taxes paid by the Appellant should be its share of the foreign taxes paid by Crown Point in relation to that same income, even though Crown Point is a separate legal entity under the laws of Delaware. The Appellant would bear the economic burden of such taxes as such taxes would have to be deducted from the amount that could be distributed to the Appellant.

Words and Phrases
paid