Articles

The foreign affiliate dumping rules (the “FAD Rules”) are found in section 212.3 of the Income Tax Act. Enacted in December 2012, the FAD Rules have had a significant impact on Canada’s system of international taxation. The FAD Rules are primarily meant to deter foreign-controlled multinational groups from transferring (or “dumping”) shares of the group’s foreign subsidiaries to its Canadian subsidiaries in a manner that results in inappropriate erosion of the Canadian tax base.

As the tax practice ultimately becomes increasingly complex, practitioners will undoubtedly look for new ways of applying the Act. The benefits of creativity will certainly be reaped in many cases, but as Coast Capital Savings Credit Union v. Canada (2015 TCC 195) shows, applying the Minister’s arsenal of tools against her will not always be successful.

Tax practitioners should carefully consider whether courts of inherent jurisdiction will entertain applications for incidental matters already before the Tax Court. JAFT Corp. v. Jones shows that in the case of an application for rescission or rectification, Courts are reluctant to exercise their jurisdiction when parallel litigation already exists at the Tax Court.

As the last quarter of 2015 proceeds, it is important for advisors and tax practitioners to be aware of several filing and administrative deadlines that, if not met, could resulted in unwanted administrative time and cost. This article discusses and highlights the requirements of and amendments to the section 156 “nil consideration elections” under the Excise Tax Act, R.S.C., 1985, c. E-15.

The article discusses the recent decision of Guindon v Canada, which is the first decided case that addresses the application of the preparer penalty in subsection 163.2(4) of the ITA.

The ongoing debate about international tax avoidance (often referred to as base erosion and profit shifting, or “BEPS”) and international response such as the OECD’s BEPS Action Plan (July 2013) have focused on mainly income tax. BEPS is providing both the impetus and potentially a key missing ingredient to tackle the persistent challenge of collecting sales tax on e-commerce.

Hedge does not have to relate to underlying capital transaction for capital treatment - gain on currency swaps to protect consolidated equity was on capital account.

The article provides a review of the ingredients required for a partnership to exist; with a focus on the “carried on in common” requirement.