On October 12, 2020, the Organization for Economic Co-operation and Development (OECD) transmitted a webcast to inform the latest developments regarding the work that the OECD/G-20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) has been doing to address the challenges arising from the digitalization of the economy (the so-called “BEPS 2.0”). The project builds […]
Commentary: Home Equity Tax
The debate about reforming the taxation rules of the principal residence exemption (PRE or the “Exemption”) has been revived recently. Under s.40(2)(b) of the Income Tax Act (“the Act”), a sale of a principal residence qualified as such under s.54 of the Act would result in an exempt portion of the capital gain ensuing […]
Week in Review - October 2, 2020
Federal Government Quietly Promises Automatic Tax Returns in Speech from the Throne: Prime Minister Justin Trudeau's federal government is reportedly set to introduce an automatic tax return system for simple federal tax returns, which could revolutionize access to tax return benefits for many Canadians who do not file returns every year. A study from […]
Week in Review - September 25, 2020
Supreme Court of Canada Reserves Judgement After Two Days of Hearings in "Carbon Tax" Dispute: Following two days of hearings on Tuesday and Wednesday, the Supreme Court of Canada chose to reserve judgement in the critical "carbon tax" series of cases, which unites three separate appeals from the Provinces of Alberta, Saskatchewan, and Ontario, […]
Week in Review - September 18, 2020
US Drops Tariffs on Canadian Aluminum After Canada Considers Reciprocal Measures: The Office of the United States Trade Representative announced on Tuesday that it was dropping a 10% tariff tax on imported Canadian aluminum, after media reports indicated that the Canadian government was considering reciprocal taxes on US goods. The announcement marks the end […]
Passive Investments: Revisiting and Visualizing the July 2017 Consultation Paper
The economic impacts of COVID-19 relief programs directly intersect with tax law. As the system becomes more stressed for tax revenue, discussions about seemingly immutable topics are bound to return. What was once forsaken is up for discussion. The passive investment income of private corporations is one such topic. I discuss this below. […]
Two Mischiefs and Internal Consistency: Excessive Eligible Dividends
How does the Income Tax Act know if a corporation has the capacity to pay an eligible dividend? If an eligible dividend is good for the taxpayer because it means less personal tax payable, surely the Act must police this area of the law. Below, I detail the policing regime and the purposes motivating […]
Deriving and Understanding Dividend Gross-Up Rates
Have you ever wondered why the dividend gross-up rates are what they are? Allow me to do some basic high school math to show you. Integration and its Purpose Understanding the math requires an appreciation of the purpose of dividend income “integration.” The purpose of integrating dividend income (disregarding capital dividends) is to […]
Case Summary: R. v. Schouw (2020 BCCA 232)
On August 7, 2020, the British Columbia Court of Appeal (the “Court”) upheld a lower court decision that convicted a real estate designer and developer for willfully evading Goods and Sales Tax (“GST”). The case addresses “deliberation” of a taxpayer in tax matters such that, in a case like this, it may be concluded […]
UN Proposes Withholding Tax on Digital Services
Digital taxation is one of the most contentious areas of international tax policy. On August 6, 2020, the United Nations (UN) Committee of Experts on International Cooperation in Tax Matters released a draft of the proposed new Article 12B for the UN Model Double Taxation Convention between Developed and Developing Countries (UN Model). The […]