Non-application of the anti-avoidance rule aimed at foreign affiliates

Author: John J. Lennard

On April 23, 2014, the Federal Court of Appeal rendered its long-awaited decision in Canada v. Lehigh Cement Limited (2014 FCA 103), in which it gave a strict interpretation of the anti-avoidance rule provided for in paragraph 95(6)(b) of the Income Tax Act, which applies when a person or partnership acquires or disposes of shares and “it can reasonably be considered that the principal purpose of the acquisition or disposition is to permit a person to avoid, reduce or defer the payment of tax […] that would otherwise be payable.” This decision is significant because, for a certain period of time, the Canada Revenue Agency showed a tendency to apply this provision on a general basis when assessing the structures of foreign affiliates of Canadian taxpayers.

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Disclosure Rules for Nominee Contracts Come into Force in Québec

Oct. 02, 2020 - Bill 42, An Act to give effect to fiscal measures announced in the Budget Speech delivered on 21 March 2019 and to various other measures was assented to on September 24, 2020, bringing into force the new rules respecting the disclosure of nominee contracts to Revenu Québec (RQ ). The...