Understanding Canada’a Personal Services Business (PSB) For Tax Purposes In Canada, the concept of a Personal Services Business (PSB) under subsection 125(1) of the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) (“ITA”) is a critical tax classification that
Capital v. Income in Imperial Tobacco Canada Limited v. Canada, 2011 FCA 308 Imperial Tobacco Canada Limited v. Canada, 2011 FCA 308 (CanLII), [Imperial] concerns the characterization of payments made by a corporation as being on account of income or
What does it mean to “Demolish” the Minister’s Assumptions? The good thing about tax disputes is that there is little to no room to personally and vexatiously malign a party in an attempt to gain an advantage. For example, in
Milgram Foundation v. Canada (Attorney General), 2024 FC 1405 The Applicant, the Milgram Foundation, was established in 1964 as a non-resident entity in Liechtenstein and had not filed Canadian tax returns prior to 2015. In 2015, the Foundation applied under
Notice of Objection & Voluntary Disclosures Program The ability to file a Notice of Objection to Notices of Re/assessment issued following a Voluntary Disclosure, governed by IC00-1R6-Voluntary Disclosures Program (“IC00-1R6”), was limited to specific circumstances. Importantly, taxpayers could not file
Canada Repeals Digital Services Tax Canada has decided to rescind its Digital Services Tax (DST), meaning the requirement for businesses to file DST returns and pay related amounts will be suspended until the law is officially removed. The Canada Revenue
Devon Canada Corporation v. Canada, 2015 FCA 214 Devon Canada Corporation v. Canada, 2015 FCA 214 (CanLII) [Devon] concerns the scope of what comprises a Notice of Objection under the Large Corporation Rule in subsection 169(2.1). The Federal Court of
Summary of the CRA’s Changes to the Voluntary Disclosures Program under the Income Tax Act The CRA has issued IC00-1R7 – Voluntary Disclosures Program (“IC00-1R7”), introducing several changes to the Voluntary Disclosures Program (“VDP”). Applications received on or after October
Practice Note 21 & the Rhetoric Practice Note No. 21 (dated November 30, 2018) is the Tax Court of Canada’s directive on how settlement conferences are to be handled. According to the Court: 1. Settlement conferences will not be scheduled unless parties to
The “Business” Test in Happy Valley Farms Ltd. v. The Queen, 1986 CanLII 7434 (FC) If income is characterized as business income then 100% is subject to taxation. Only 50% of a capital gain is subject to taxation. Determining whether
In Northwest Hydraulic Consultants Ltd v R, 1998 CarswellNat 696, 98 DTC 1839 [Northwest], the Tax Court of Canada considered whether certain scientific and technical work conducted by the appellant qualified as scientific research and experimental development (SR&ED) under the Income
How is CRA Improving its Ability to Collect Crypto Currency Data? Currently, governments and tax agencies such as Canada Revenue Agency (CRA) are putting together a framework to better track and tax crypto currency transactions. The CRA has adopted two primary
Tax Court of Canada Jurisdiction & Main Rehabilitation Co. v. Canada, 2004 FCA 403 The Tax Court of Canada does not have the jurisdiction to consider issues of abuse of process. Its jurisdiction is limited to determining the correctness of
Choptiany v. The King, 2022 TCC 112 The case of Choptiany v. The King, 2022 TCC 112 involved a tax scheme promoted by DeMara Consulting Inc. and Fiscal Arbitrators. It centered on convincing some taxpayers to unwittingly claim fictitious business
Interlining and GST/HST In Canada’s transportation and logistics industries, interlining is a widespread practice that aids the efficient transfer of freight over long distances. However, understanding the tax implications—specifically around GST (Goods and Services Tax) and HST (Harmonized Sales Tax)—is
Director Liability & Resignation Under certain circumstances, directors of a corporation can be held personally liable for the tax arrears of a corporation. This is referred to as director liability and one defense is that the Canada Revenue Agency (“CRA”)
Tax Law Services Portfolio – Memorandum of Understanding The Department of Justice (DOJ) in Canada primarily represents the Crown, not the Canada Revenue Agency (CRA) as an independent entity. How it works: The CRA is a federal agency responsible for
Eligible Canadian Public Corporations & SR&ED Historically, only Canadian Controlled Private Corporations (“CCPC”) have been eligible to claim Scientific Research & Experimental Development (“SR&ED”) tax incentives. However, now eligible Canadian public corporations (i.e., publicly‑listed but not foreign‑controlled) can claim the
Swift v. The Queen, 2020 TCC 115 & Coates v. The Queen, 2011 TCC 74 & GST/HST In Ontario, for example, many taxpayers bought and/or renovated homes consecutively during the housing upturn. Consequently, it has been common for Canada Revenue
Understanding Reprisal Complaints Against the Canada Revenue Agency (CRA) Canada Revenue Agency (“CRA”) employees have enormous individual discretion facilitated by the law. It was only relatively recently that Canadians were able to complain to a third-party, a service complaints division.