Blogue

Al-Rubaiy v. R. – TCC: Common law discoverability rule does not apply to applications for rebates of GST/HST under the Excise Tax Act

30 mars 2020 By Bill Innes

Précis: The taxpayer filed a GST/HST rebate application late. He claimed that he was entitled to rely upon the common law principle of discoverability to extend the time to file his rebate claim. The Tax Court held that the common law rule did not apply to the rebate provisions of the Excise Tax Act. Thus the appeal was dismissed. There was no order as to costs.
Al-Rubaiy v. R. – TCC: Common law discoverability rule does not apply to applications for rebates of GST/HST under the Excise Tax ActPlus >

Hamilton v. R. – TCC: Taxpayer entitled to non-taxable overtime meal allowance at remote work site but not the costs of transportation from an intermediary location

27 mars 2020 By Bill Innes

Précis: The taxpayer was employed on remote, mostly northern, work sites and at issue was the taxation of certain meal and travel allowances paid to him by his employer. The Tax Court found that the overtime meal allowance was not taxable but the travel allowance was since it was not an allowance for travel to a remote work site from the taxpayer’s principal residence.
Hamilton v. R. – TCC: Taxpayer entitled to non-taxable overtime meal allowance at remote work site but not the costs of transportation from an intermediary location Plus >

Canada v. CBS Canada Holdings Co. – FCA: Crown bound by the terms of settlement agreement it entered into with taxpayer

27 mars 2020 By Bill Innes

Précis: The taxpayer entered into a settlement agreement with the Crown in the course of a Tax Court appeal. After the settlement agreement was executed the Crown advised the taxpayer that it had concluded that one of the proposed reassessments could not be issued. The taxpayer successfully brought a motion in the Tax Court to allow the appeal. The Crown appealed to the Federal Court of Appeal. The Court of Appeal dismissed the Crown’s appeal with costs to the taxpayer fixed at $15,000 (including disbursements).
Canada v. CBS Canada Holdings Co. – FCA: Crown bound by the terms of settlement agreement it entered into with taxpayerPlus >

Pangea One Acquisition Holdings XII S.A.R.L. v. R. – FCA: Tax Court decision upheld – letter agreement was a “restrictive covenant” subject to withholding under Part XIII

27 mars 2020 By Bill Innes

Précis: Pangea entered into a letter agreement concerning the sale of shares of Public Mobile Holdings Inc. and received $3,000,000 from Thomvest Seed Capital Inc. (another shareholder of Public Mobile Holdings Inc.): [3] In 2013, Telus Communications Inc. offered to purchase all the shares of Public Mobile Holdings Inc. At the time, the shares were owned by three shareholders, one of which was Pangaea. Pursuant to a unanimous shareholders’ agreement, Pangaea had a veto right such that the other shareholders could not sell their shares without Pangaea’s consent. [4] Pangaea made it clear that it was not willing to sell at the price offered. In order to induce Pangaea to accept the offer, another shareholder, Thomvest Seed Capital Inc., provided a payment to Pangaea pursuant to a letter agreement. Under the agreement, Thomvest paid $3,000,000 to Pangaea in return for Pangaea’s agreement to execute a proposed share purchase agreement with Telus. In the share purchase agreement, the three shareholders of Public Mobile would each agree to sell its shares to Telus. Shortly after the letter agreement with Thomvest was signed, the share purchase agreement was executed. [5] Thomvest withheld Part XIII tax on the $3,000,000 payment to Pangaea. Pangaea sought a refund of the tax from the Minister of National Revenue which was denied. The Minister also issued an assessment of the tax to Pangaea pursuant to subsection 227(7) of the Act. Pangaea appealed from this assessment to the Tax Court. Pangea lost in the Tax Court and appealed to the Federal Court of Appeal. The sole question for the Court of Appeal was whether the $3,000,000 was paid in respect of a restrictive covenant. The Court of Appeal concluded that it was and dismissed the appeal with costs fixed in the amount of $1,500 inclusive of disbursements.
Pangea One Acquisition Holdings XII S.A.R.L. v. R. – FCA: Tax Court decision upheld – letter agreement was a “restrictive covenant” subject to withholding under Part XIIIPlus >

Ampratwum-Duah v. R. – TCC: Tax Court rejects charitable receipts signed by taxpayer as religious leader of charity

24 mars 2020 By Bill Innes

Précis: The taxpayer was the religious leader of City Chapel Ministries International (CCMI). He claimed charitable donations to CCMI in the 2005, 2006 and 2007 taxation years based on charitable receipts from CCMI that were signed by him. CRA disallowed the donations and the taxpayer appealed to the Tax Court. The Tax Court dismissed the appeal on the basis that the evidence adduced at the hearing did not support the fact that CCMI had received the disputed donations. As a result the appeal was dismissed. There was no order as to costs since this was an informal procedure appeal.
Ampratwum-Duah v. R. – TCC: Tax Court rejects charitable receipts signed by taxpayer as religious leader of charityPlus >

Galvis v. R. – TCC: Taxpayer, a salesman of business devices, such as credit card readers, not entitled to additional motor vehicle expenses or costs of using “telemarketers”

24 mars 2020 By Bill Innes

Précis: The taxpayer (referred to in the decision as MG) claimed deductions for expenses in connection with a Mercedes Benz used by him in his work in 2014 and 2015 (he had been previously allowed motor vehicle expenses in connection with another car, a Nissan, operated by him). He also claimed amounts paid to “telemarketers” in connection with the sales activities. The Tax Court found that the taxpayer had not met the evidentiary onus necessary to support either category of expenses. The appeal was dismissed without costs since this was an informal procedure appeal.
Galvis v. R. – TCC: Taxpayer, a salesman of business devices, such as credit card readers, not entitled to additional motor vehicle expenses or costs of using “telemarketers”Plus >

BAHA Property Investment Group Inc. v. R. – TCC: Corporation not entitled to New Residential Rental Property Rebate where not named in original agreement of purchase and sale

20 mars 2020 By Bill Innes

Précis: In 2010 two individuals - Charnkamal Hansra and Balvir Bassi – signed an agreement of purchase and sale to acquire a condominium (unit 5, level 20) in a property to be built by Ferncastle (Esplanade) Inc. in Toronto. On closing the deed was issued in the name of BAHA Property Investment Group Inc. The corporation applied for the New Residential Rental Property Rebate which was denied on the basis that it was not named in the 2010 agreement of purchase and sale. The corporation appealed to the Tax Court which dismissed the appeal holding that there was no evidence of an assignment of the rights under the 2010 agreement to BAHA. There was no order as to costs since this was an informal procedure appeal.
BAHA Property Investment Group Inc. v. R. – TCC: Corporation not entitled to New Residential Rental Property Rebate where not named in original agreement of purchase and salePlus >

Xia v. R. – FCA: Pooled tips were not a non-taxable windfall to slot machine attendant – gross negligence penalties sustained

19 mars 2020 By Bill Innes

Précis: The taxpayer was a slot machine attendant. He was assessed for his share of pooled tips and the Minister imposed gross negligence penalties. The taxpayer argued in the Tax Court that the amount was a non-taxable windfall. He was unsuccessful in the Tax Court and appealed to the Federal Court of Appeal. The Court of Appeal dismissed the appeal from the bench, with costs.
Xia v. R. – FCA: Pooled tips were not a non-taxable windfall to slot machine attendant – gross negligence penalties sustainedPlus >

MacDonald v. R. – SCC: Intention to hedge inferred from facts by SCC – or did it abandon “intention” altogether?

17 mars 2020 By Bill Innes

Précis: This case turned on the treatment of cash settlement payments of $9,936,149 made by Mr. MacDonald on a derivative contract in his 2004-2007 taxation years. Mr. MacDonald treated them as business losses on the basis that he was speculating with the derivative contract; CRA assessed them as capital losses on a hedge of Bank of Nova Scotia shares owned by him. The Tax Court allowed Mr. MacDonald’s appeal and CRA appealed to the Federal Court of Appeal. The Court of Appeal allowed CRA’s appeal, with costs, holding that the Tax Court had erred in failing to follow the recent Tax Court decision in George Weston Limited v. The Queen, 2015 TCC 42 and that Mr. MacDonald’s intention was not relevant in determining whether the derivative contract was a hedge: “[92] Based on the case law, an intention to hedge is not a condition precedent for hedging. … ”. The Supreme Court of Canada by a 8 to 1 decision dismissed Mr. MacDonald’s appeal: “ … this arrangement reveals the necessary linkage between Mr. MacDonald’s Bank of Nova Scotia shares and the forward contract to indicate a hedging purpose.” [para. [42] per Abella J.S.C.C.]. Côté, J.S.C.C. in dissent would have allowed the appeal: “On balance, while some of the objective economic indicators are consistent with an intent to hedge, there are also objective circumstances that suggest an intent to speculate, and I am not persuaded that the trial judge’s findings of fact should be overturned on the application of a deferential standard of review. [para. 86].”
MacDonald v. R. – SCC: Intention to hedge inferred from facts by SCC – or did it abandon “intention” altogether?Plus >

Tudora v. R. – TCC: Tax Court applied the Mariano decision (2015 TCC 244) to deny charitable tax credit in same donation program

17 mars 2020 By Bill Innes

Précis: The taxpayer claimed charitable donation credits totaling $30,056 in 2005 in connection with a cash gift of $5,000 to the Global Learning Gifting Initiative Program. The program was exactly the same one that had been unsuccessful in Mariano (2015 TCC 244). MacPhee J. applied the principal of judicial comity and dismissed the appeal for the same reasons set out by Justice Pizzitelli in Mariano. Each party was to bear their own costs (this was an informal procedure appeal).
Tudora v. R. – TCC: Tax Court applied the Mariano decision (2015 TCC 244) to deny charitable tax credit in same donation programPlus >

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