The Resource Velcro Canada Inc v R : 2012 TCC 57

Velcro Canada Inc v R : 2012 TCC 57

Label
Velcro Canada Inc v R : 2012 TCC 57
Title
Velcro Canada Inc v R : 2012 TCC 57
Creator
Contributor
Subject
Language
eng
Summary
Judgment by the Tax Court of Canada, dated 24 February 2011. The taxpayer was a Canadian company which paid royalties under a licence agreement to Velcro Industries BV, a Dutch company which became a resident of the Netherlands Antilles. Velcro Antilles assigned the licence agreement to a subsidiary, Velcro Netherlands. Under the assignment Velcro Antilles retained the right to enforce the licence agreement and Velcro Netherlands was required to pay to Velcro Antilles a sum equal to 90% of the royalties received from Velcro Canada. Velcro Canada continued to pay the royalties to Velcro Netherlands and to deduct 10% as provided for in the Canada-Netherlands double taxation convention. The Revenue claimed that the beneficial owner of the royalties was Velcro Antilles and since there was no double taxation convention between Canada and the Netherlands Antilles, tax should have been deducted at the rate of 25%. The Revenue Agency issued assessments and imposed penalties. Velcro Canada appealed against the assessments and penalties. The Tax Court held (allowing the taxpayer's appeal) that the beneficial owner of the royalties was Velcro Netherlands. It had the possession, use, risk and control of the funds. It was contractually bound to pay an amount equal to 90% of the royalties to Velcro Antilles but entitled to deal with the actual payments received from Velcro Canada as it saw fit. If Velcro Antilles chose to enforce the licence agreement, the payments were still made to Velcro Netherlands and Velcro Netherlands had no power to bind Velcro Antilles and was therefore not its agent
Citation source
In: International tax law reports. - London. - Vol. 14 (2012),
http://bibfra.me/vocab/relation/comm
2ul8NlLeYHs
http://library.link/vocab/creatorName
Nikolakakis, A
Geographic coverage
  • Europe
  • European Union
  • North America
Language note
English
http://library.link/vocab/relatedWorkOrContributorName
Baker, P
http://library.link/vocab/subjectName
  • case law
  • beneficial ownership
  • tax treaty
  • royalties
Label
Velcro Canada Inc v R : 2012 TCC 57
Publication

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.37366609999999 4.9336932
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