The Resource CIT Group Securities (Canada) Inc v R : 2016 TCC 163

CIT Group Securities (Canada) Inc v R : 2016 TCC 163

Label
CIT Group Securities (Canada) Inc v R : 2016 TCC 163
Title
CIT Group Securities (Canada) Inc v R : 2016 TCC 163
Contributor
Subject
Language
eng
Summary
Judgment of the Tax Court of Canada, judgment date: 4 July 2016. The taxpayer, CIT Group Securities (Canada), was reassessed by Revenue Canada on the basis that its income included income earned by controlled foreign affiliates (CFAs). The taxpayer was the sole shareholder in eight Barbados international trust corporations and joint shareholder in a ninth. They in turn held the shares in CCG Trust Corporation (CCG). Under s 95(2)(l) of the Income Tax Act, the taxpayer was liable to be assessed on the income of its CFAs if the principal purpose of the CFA was to trade in indebtedness other than arm's length dealings, unless the CFA was a foreign bank. "Foreign bank" was defined in s 95(1) by reference to the Bank Act. The taxpayer appealed. This case contains a detailed discussion of the Canadian controlled foreign affiliate rules relating to foreign accrual property income (FAPI). The controlled affiliates of the appellant Canadian company included nine international business companies incorporated and resident in Barbados. As such, the income of these subsidiaries prima facie fell within the FAPI regime. That regime contains, like many similar regimes, an active business exception, with a specific definition of foreign banking activities. After an examination of both the facts and a discussion of the detail of the legislation, the court concludes that the subsidiaries came within that exception. There is a detailed examination of the wording of the exception and some general comments on the relevant approach to statutory interpretation in this case
Citation source
In: International tax law reports. - London. - Vol. 19 (2016), part 1 ; p. 73-146
Language note
English
http://library.link/vocab/relatedWorkOrContributorName
Baker, P
http://library.link/vocab/subjectName
  • case law
  • CFC
  • foreign accrual property income
  • foreign bank
  • tax treaty
Label
CIT Group Securities (Canada) Inc v R : 2016 TCC 163
Instantiates
Publication
Label
CIT Group Securities (Canada) Inc v R : 2016 TCC 163
Publication

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