Articles 2022

Applicable to contractual obligations arising or assumed as of January 1, 2023, pursuant to the Federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, (the “Federal foreign buyer ban”) non-Canadian citizens, non-permanent residents, and others deemed to be “non-Canadian” have been barred from purchasing residential property across Canada for two years.

Subsection 168(1) states that GST/HST tax is generally payable on the earlier of when the consideration for the supply is paid and when it becomes due, the latter of which generally falls on the invoice date. However, in CFI Funding Trust v. The Queen, the Tax Court of Canada held that an invoice issued by the supplier is not necessary to claim an input tax credit and to satisfy requirements of the Excise Tax Act (Canada) and the Input Tax Credit Information (GST/HST) Regulations.

The general anti-avoidance rule in section 245 of the Income Tax Act is essentially an interpretive rule. In Canada Trustco, the Supreme Court adopted a single, unified approach to the misuse or abuse analysis, which rejected “abuse of the Act read as a whole” as a separate test. In the recent GAAR Consultation paper, the Finance expressed concern over the unified approach and considered codifying the “scheme” approach in Copthorne to give more weight to “abuse of the Act read as whole.”

Blockchain was first theorized as a concept in the early 1990s. However, it took 20 years before blockchain was utilized to create Bitcoin, the first cryptocurrency, in early 2009. While the use of blockchain to create cryptocurrencies took nearly 20 years, its popularity has exploded since the creation of Bitcoin. 

In the era of globalization and technology overtaking traditional business form, the companies and individuals spending more on obtaining intangible property in order to protect its unique identity by way of marks or patents or logo. With companies and businesses operating across the globe, the question arises as to which country has gained the right to levy taxes on profits arising out of intangible assets or property.

This paper first lays out the current system for determining the allocation of multinational enterprises’ revenues for the purposes of taxation, followed by a layered example to aid in clarification, a discussion on the concerns the current system enables, a brief overview of the OECD’s response of Pillar One, and some of the practical implementation issues Pillar One faces, concluding with views on how to more easily achieve the Pillar One aims in a fashion that may be met with less resistance.

Allison Blackler answers questions about her unique experiences as a woman in tax law. The article gives other lawyers and law students insight into potential career choices in tax law and words of advice on how to build a successful tax practice.

The 2022 Federal Budget, tabled on April 7, 2022, proposes the introduction of the substantive Canadian-controlled private corporation rules. The change provides that non-Canadian-controlled private corporations that meet the definition of a “substantive CCPC” will also be subject to the refundable tax on investment income regime that Canadian-controlled private corporations are subject to.

The article discusses two latest decisions by the Tax Court of Canada: Raymond Stewart v Her Majesty The Queen, 2021 TCC 94, which resulted in the removal of subsection 163(2) of the Income Tax Act gross negligence penalties levied against the appellant and allowed substantial subcontractor expenses in the context of a net worth audit; and Pansy Halls v Her Majesty The Queen, 2022 TCC 14, which dealt with a net worth audit of an unincorporated restaurant business owned by two spouses.

Bill C-208 received Royal Assent on June 29, 2021, and brought amendments to section 84.1 which allows for transfers of qualified small businesses, family farms, and fishing corporations to receive the same tax treatment when transferred between family members, as when the business is sold to an unrelated third party.  From an economic policy perspective, these amendments are positive to say the least.