Blogue

703008 B.C. Ltd. v. R. - TCC: Owner/builder leasing new condos as a financing method liable for GST

4 septembre 2015 By Bill Innes

Précis: The appellant constructed a number of condo units. As an innovative financing technique the units were initially leased to purchasers who had an option to purchase them. The appellant collected GST from the lessees. CRA disagreed and taxed the appellant on its self-supply of the property for rental purposes ($599,605.34). The appellant appealed to the Tax Court.
703008 B.C. Ltd. v. R. - TCC: Owner/builder leasing new condos as a financing method liable for GSTPlus >

McKesson settles with a whimper not a bang

3 septembre 2015 By Bill Innes

Précis: In its Form 10-Q filed on July 29, 2015 McKesson Corp disclosed details of its settlement with CRA first disclosed in its Form 10-K filed May 12, 2015. The disclosure reads: “we reached an agreement to settle the transfer pricing matter for years 2003 through 2010 and recorded a discrete income tax benefit of $12 million for a previously unrecognized tax benefit.”
McKesson settles with a whimper not a bangPlus >

9114-4766 Québec v. R. - TCC: Solomonic decision - no ITCs but no penalty either for proto-businesses

3 septembre 2015 By Bill Innes

Précis: This is a recently translated decision of Lamarre J. rendered before she was appointed Associate Chief Justice. Essentially the case dealt with 7 number companies which acquired software with the intention of starting net businesses which would provide financial simulation services. Each of the corporations claimed ITCs. The Minister denied the ITCs and imposed penalties under section 285 of the Excise Tax Act (the “ETA”) on the basis that they had never in fact entered into commercial activities since the web sites were never operative.
9114-4766 Québec v. R. - TCC: Solomonic decision - no ITCs but no penalty either for proto-businessesPlus >

Garmeco Canada v. R. - TCC: Court refuses to pierce corporate veil for GST purposes

2 septembre 2015 By Bill Innes

Précis: The appellant was a corporation that formed part of a complex organization of corporations all of which were ultimately owned and controlled by Mrs. Hilda Georges Abou Rached. The appellant paid various expenses incurred by corporations within the group and claimed ITCs in respect of payments made by members of the group. The Court dismissed the appeal (with the exception of $33.09 in ITCs it allowed) and awarded costs of $1,000 to the Crown.
Garmeco Canada v. R. - TCC: Court refuses to pierce corporate veil for GST purposesPlus >

Guindon v. R - SCC: Tax preparer penalties survive a Charter-based challenge

2 septembre 2015 By Bill Innes

Précis: Ms. Guindon was a lawyer who had issued an opinion which was used to market a charitable leveraged donation program; she was also an officer of the charity involved and signed the tax receipts that were issued totalling $ 3,972,775. She was assessed advisor penalties totalling $546,747 pursuant to subsection 163.2 (4) of the Income Tax Act (the “Act”), the so-called “preparer penalty”.
Guindon v. R - SCC: Tax preparer penalties survive a Charter-based challengePlus >

HLP Solution Inc. v. R. - TCC: CRA official not permitted to give expert SRED evidence

1 septembre 2015 By Bill Innes

Précis: CRA denied certain SRED claims made by the appellant. The Crown advised that it intended to call at trial the expert evidence of Ms. Rosu, a CRA official who had been involved at all stages of the assessment process. The appellant objected to the admission of her evidence on a preliminary motion.
HLP Solution Inc. v. R. - TCC: CRA official not permitted to give expert SRED evidencePlus >

Pellerin v. R. - TCC: Infant entitled to capital gains exemption

1 septembre 2015 By Bill Innes

Précis: In this case shares were formerly held by a trust of which the appellant was a beneficiary. The trust had been created in 2005 at a time the appellant was not yet born or conceived. They were transferred to the appellant after he was born and sold in 2008 in the year he turned one year old. The date of the sale was more than 24 months from the date of his conception, which the parties agreed was in June of 2006.
Pellerin v. R. - TCC: Infant entitled to capital gains exemptionPlus >

Coast Capital Savings Credit Union v. R. - TCC: Taxpayer cannot plead “sham”

31 août 2015 By Bill Innes

Précis: The taxpayer was the unknowing victim of an RRSP strip scheme. The annuitants set up self-administered RRSPs with the taxpayer and then directed the taxpayer to use the funds in the RRSP to purchase the shares of a Canadian corporation from a third party. The promoters of the scheme then transferred the purchase money offshore into vehicles to which the annuitants had access but, theoretically, in which they had no ownership interest.
Coast Capital Savings Credit Union v. R. - TCC: Taxpayer cannot plead “sham”Plus >

C.J. McCarty Inc. v. R. - TCC: Taxpayer was not an incorporated employee

31 août 2015 By Bill Innes

Précis: Bruce McCarty was the principal of C.J. McCarty Inc. (“CJ”) which provided construction management services on large construction projects. Mr. McCarty had more than 35 years experience in the industry. In 2007 and 2008 CJ provided construction management services to MEG Energy Corp. (“MEG”) in connection with the construction of refinery facilities at Christina Lake, British Columbia. CRA took the position that CJ was a “personal services business”, e.g., that Mr. McCarty was an “incorporated employee”.
C.J. McCarty Inc. v. R. - TCC: Taxpayer was not an incorporated employeePlus >

Tele-Mobile Company v. R. - TCC: Roaming services in US not a separate supply for GST

28 août 2015 By Bill Innes

Précis: The issue in this decision was whether roaming airtime services (“RAT”) provided to Tele-Mobile customers making long distance calls from the United States to Canada were a separate supply or simply part of the supply of telephone services by Tele-Mobile. If the former, the supply would not be taxable in Canada since the supply was not “made” in Canada. If the latter, the supply would be taxable since it would be “made” in Canada.
Tele-Mobile Company v. R. - TCC: Roaming services in US not a separate supply for GSTPlus >

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