http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/142669/index.do
Beggs v. The Queen (January 20, 2016 – 2016 TCC 11, Favreau J.).
Précis: The appellants had applied for a waiver of withholding tax in respect of performances by non-residents. CRA denied the waiver request and the appellant ended up appealing to the Tax Court. The Crown moved to strike the appeals on the basis that the Tax Court did not have jurisdiction to review the refusal to issue a waiver. The Tax Court struck the appeals, holding that it did not have jurisdiction over the matter. There was no order as to costs as these were all informal procedure appeals.
Decision: The facts were simple:
1. On October 15, 2012, Ram Management Inc. submitted a tax waiver application on behalf of Hackett Songs Ltd. regarding withholdings for fees to be paid to non-resident employees and sub-contractors for services rendered in Canada between November 26 and December 11, 2014.
2. On November 19, 2014, the Canada Revenue Agency’s (“CRA”) Non-Resident Audit section issued a decision regarding the withholding waiver. This decision mandated that withholding be applied to payments made to the employees and subcontractors.
3. On February 17, 2015, CRA confirmed its decision of November 19, 2014.
In a nutshell the Tax Court held that the appellants were in the wrong court if they wanted to review the refusal to issue a waiver:
[26] The Appellants submitted that CRA made a determination that they were liable to pay tax in Canada and that, this determination was equivalent to an assessment. I do not agree with this assertion because a waiver is not a determination of the tax liability of a non-resident but it is a decision with regards to giving permission to a Canadian taxpayer or a non-resident payor to not withhold taxes on amounts payable to a non-resident. The tax liability of the non-resident can only be determined by an assessment after a review of his or her tax return. Even if a waiver was granted in respect of a payment of fees to a non-resident, the non-resident will still have to file a tax return at the end of the year. The only difference is that the non-resident would not have been withheld an amount to be applied on his taxes and will not have to claim a refund for the amount paid in excess.
[27] The Appellants also argued that no appeal would then be available. When the Appellants will file their tax returns, they will each receive a notice of assessment and each of them will be able to appeal this notice of assessment if they do not agree with the assessment. In any event, the Appellants will always have the opportunity to turn themselves to the Federal Court of Canada in order to force the Minister to change its decision as stated by Justice Bowie in Kravetsky. I agree with the Respondent that the ministerial decision to grant a waiver would be equivalent of a mandamus.
[28] For the foregoing reasons, the Respondent’s motion to dismiss the Appellants’ appeals is allowed and the appeals are dismissed.