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Nestlé Canada v. R. - No ITCs for GST/HST purposes on imaginary coupons

29 mars 2017 By Bill Innes

Précis: The taxpayer claimed ITCs for GST/HST purposes on what it termed “instant rebate coupons” for its products sold at Costco. The problem was that it did not issue any coupons, either in paper form or in electronic form. Costco just automatically applied a discount to the products when they were purchased. CRA denied the ITCs on the basis that the discount was not a coupon but a promotional allowance under section 232.1 of the Excise Tax Act. The taxpayer appealed. Associate Chief Justice Lamarre reached the somewhat inevitable conclusion that without coupons the taxpayer had no case. The appeal was dismissed with costs.
Nestlé Canada v. R. - No ITCs for GST/HST purposes on imaginary couponsPlus >

Aeronautic Development Co. v. R - TCC: Taxpayer controlled de facto by non-resident - no ITCs for SRED

24 mars 2017 By Bill Innes

Précis: The taxpayer claimed refundable SRED investment tax credits (ITCs) in 2009, 2010 and 2011 in connection with the prototyping and certification of an amphibious aircraft known as the Seawind. CRA denied the ITCs on the basis that the taxpayer was under the de facto control of Mr. Richard Silva, who is a non-resident of Canada. Shortly prior to trial CRA added a new argument based on an allegation that the taxpayer was under the de jure control of Seawind Development Corporation (“Seawind Corp.”), a corporation legally controlled by Mr. Silva. The Court rejected the de jure control argument both because it was pleaded too late and on the evidence adduced.
Aeronautic Development Co. v. R - TCC: Taxpayer controlled de facto by non-resident - no ITCs for SREDPlus >

Peach v. R. - TCC: Taxpayer allowed modest business expenses upon reconsideration after FCA appeal

24 mars 2017 By Bill Innes

Précis: At trial Justice Bocock dismissed the taxpayer’s appeal both on the issue of rental losses and expenses from a financial consulting business. That decision was sustained in the Federal Court of Appeal on the issue of rental losses but reversed on the consulting business and remitted back to the Tax Court for a determination of the reasonableness of the expenses claimed. Justice Bocock made that determination on the basis of the trial record and additional submissions of the parties. He allowed somewhat less than half of the amounts at issue. Costs were awarded to Mr. Peach on the informal procedure Tariff, subject to the right of the parties to make further submissions within 30 days.
Peach v. R. - TCC: Taxpayer allowed modest business expenses upon reconsideration after FCA appealPlus >

Safar-Zadeh v. R. - TCC: No GST rebate - taxpayer could not afford to maintain home as primary residence

22 mars 2017 By Bill Innes

Précis: Mr. Safar-Zadeh applied for a GST/HST new housing rebate in respect of a home (the “161 Shirrick Property”). The agreement of purchase and sale was entered into in June of 2011 and the sale closed on 21 November 2012. Five or six months later the property was sold at a profit. After an extensive review of the facts the Court concluded that Mr. Safar-Zadeh had not intended to acquire the 161Shirrick Property as a primary residence since he and his wife did not have the income to maintain it. As a result the appeal was dismissed. There was no order as to costs since this was an informal procedure appeal.
Safar-Zadeh v. R. - TCC: No GST rebate - taxpayer could not afford to maintain home as primary residencePlus >

Wolsey v. R - TCC: Taxpayer’s delays result in cost award against him - twice the Tariff

21 mars 2017 By Bill Innes

Précis: Mr. Wolsey’s appeal was dismissed for failure to appear at a status hearing. He moved to set aside that dismissal and the motion was heard over a period of 4 days (August 23 and 24 and September 15 and 16, 2016) and dismissed on October 24, 2016. The Court asked for submissions on costs. Mr. Wolsey did not make any submissions. The Crown asked for costs equal to twice the Tariff plus disbursements. After reserving for several months Justice Graham awarded the Crown what it had asked for, $19,689.
Wolsey v. R - TCC: Taxpayer’s delays result in cost award against him - twice the TariffPlus >

Cooper v. R. - TCC: Justice Bocock recuses himself in KPMG tax plan case after CBC report

15 mars 2017 By Bill Innes

Précis: In a very rare move Justice Bocock has, of his own motion, recused himself in the Cooper decision which involves a tax plan of KPMG and Dentons which plan has been the subject of considerable adverse publicity. CBC reported that Justice Bocock attended a social function in Madrid sponsored by Dentons as part of the recent IFA Conference there. The Canadian Judicial Council (“CJC”) then opened a preliminary investigation of the matter. Justice Bocock referred the matter back to Chief Justice Rossiter, himself the subject of a CJC preliminary investigation.
Cooper v. R. - TCC: Justice Bocock recuses himself in KPMG tax plan case after CBC reportPlus >

Canadian Forest Navigation v. R. - FCA: Effect of foreign court orders sent back to Tax Court as issue of fact

14 mars 2017 By Bill Innes

Précis: The appellant received payments in 2004, 2005 and 2006 from its foreign affiliates. The payments were described as dividends. Subsequently the appellant obtained rectification orders in Cyprus and Barbados declaring such payments not to be dividends but rather transfers that resulted in indebtedness by the appellant to the foreign affiliates in the amount of the transfers. The appellant applied for an order under section 58 of the Tax Court of Canada Rules (General Procedure) that a question of law be determined before the hearing:
Canadian Forest Navigation v. R. - FCA: Effect of foreign court orders sent back to Tax Court as issue of factPlus >

Parthiban v. R. - TCC: Home occupied by a non-resident and his family was primary residence for GST rebate

13 mars 2017 By Bill Innes

Précis: This was one of those “scratch your head” cases where CRA stuck to an indefensible position throughout while being polite and cooperative with the Court. Mr. Parthiban was a resident of the United Kingdom. In 2012 he bought a residence in Canada where he and his family resided. He claimed a GST new housing rebate which CRA denied on the basis that he was a visitor to Canada and not a resident of Canada. Justice Boyle held that CRA’s position was simply wrong:
Parthiban v. R. - TCC: Home occupied by a non-resident and his family was primary residence for GST rebatePlus >

Paletta v. R. - FCA: Appeal from refusal to permit a Rule 58(1) hearing on penalties dismissed from Bench

9 mars 2017 By Bill Innes

Précis: The taxpayer applied in the Tax Court for a Rule 58(1) application to determine whether penalties attributable to neglect, carelessness or wilful default were applicable in his tax appeal. Owen J. of the Tax Court refused the application on the basis that the matter was best determined at trial. The taxpayer appealed to the Federal Court of Appeal which dismissed the appeal from the bench, with costs, finding no reversible error in the decision of Justice Owen.
Paletta v. R. - FCA: Appeal from refusal to permit a Rule 58(1) hearing on penalties dismissed from BenchPlus >

Farm Credit Canada v. R. - TCC: Taxpayer a “loan corporation” for GST/HST purposes

8 mars 2017 By Bill Innes

Précis: This is a decision on about as esoteric a point as one can get in GST/HST litigation. For the periods under appeal Farm Credit Canada claimed to be a “general corporation” for the purposes of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations (the “Attribution Regulations”) adopted pursuant to Part IX of the Excise Tax Act (the “ETA”). CRA assessed Farm Credit on the basis that it was a “loan corporation” for the purposes of the attribution regulations. The sole question before the Tax Court was whether Farm Credit was a “loan corporation” during the periods in question under the Attribution Rules.
Farm Credit Canada v. R. - TCC: Taxpayer a “loan corporation” for GST/HST purposesPlus >

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