In a decision expected by tax pundits to set a precedent, the Quebec taxman partially lost a legal battle after the Court of Appeal held that coverage provided by a universal life insurance policy does not constitute income from property even though it is a benefit for the insured taxpayer.
Insurer loses battle against Quebec tax authorities.
Canada Revenue Agency has been ordered to pay nearly $5 million in damages to two well-known Montreal businessmen after conducting a tax investigation into an offshore investment vehicle they held.
Taxpayers are entitled to use the mark-to-market method to compute income for federal tax purposes if it provides a more accurate picture of a taxpayer’s income, ruled the Federal Court of Appeal.
The federal appeal court decision bolsters the possibility for taxpayers to use methods to compute income that are not forbidden by the Income Tax Act (Act), affirms Canada Revenue Agency’s administrative position that allows regulated financial institutions to tax derivatives on a mark-to-market basis, and may open the door to allow financial accounting to become more influential in determining what constitutes an acceptable method of computing income from business, according to tax experts.
Nearly six months after 20 Revenue Quebec officials raided the Montreal offices of Uber Canada Inc. as part of a tax investigation, the popular ride-sharing service won a legal battle against the provincial taxman after the Quebec Court of Appeal overturned a lower court ruling and held that the seized evidence must be sealed.
Taxpayers do not have a general license to “travel back to through time” with the benefit of hindsight to reverse or correct unintended tax consequences of commercial dealings, held the Quebec Court of Appeal in two separate but related rulings.
An ambitious international effort calling for a coordinated approach to rewrite global tax rules over profit shifting risks being undermined by the number of growing countries that are unilaterally introducing significant tax reforms, warn tax experts.
The Paris-based Organisation for Economic Co-operation and Development (OECD), backed by the G20 Finance Ministers, proposed in July 2013 a sweeping series of proposals that take aim at aggressive international tax planning by multinational companies in the wake of intense political scrutiny and public outcry over the likes of Apple Inc., Google Inc. and Starbucks moving billions of profits out of higher-tax countries into low or no-tax jurisdictions.
The plan, known as Base Erosion Profit Shifting (BEPS), lists 15 specific actions that will attempt to tackle tax challenges of the digital economy, establish coherent rules for corporate income taxation, prevent tax treaty abuse, increase transparency by taxpayers, and amend the world’s 3,000 bilateral tax treaties through a multilateral instrument.