Introduction: The General Anti-Avoidance Rule & Documentary Discovery during Tax Litigation Section 245 of Canada’s Income Tax Act contains the general anti-avoidance rule (also known as the “GAAR”). The GAAR aims to prevent taxpayers from enjoying tax benefits by invoking avoidance transactions that misuse or abuse specific provisions of...
Introduction – What are Statute-Barred Tax Years? The Canadian tax system is based on the principles of self-assessment, which requires that Canadian taxpayers perform their own due diligence and to report their taxable income to the Canada Revenue Agency (“CRA”) for tax assessment. Under subsection 152(1) of the Canadian...
A gift is generally defined as a voluntary and gratuitous transfer of property, without any consideration given in exchange. A personal gift made in Canada may or may not be made on a tax-free basis, depending on the nature of the relationship between parties. A deed of gift can...
Introduction – Digital Payment Services and Financial Reporting Obligations Digital payment services like those offered by PayPal, which are used to facilitate money transfers domestically and internationally, are now well-integrated into our personal and professional lives. Whether your PayPal account is used for genuine commercial purposes, however, or for...
Introduction – T1135s and Beneficial Ownership The Canadian Income Tax Act requires that Canadian tax residents who own “specified foreign property” with a cost of $100,000 or more in Canadian dollars file an annual Foreign Income Verification Statement, or “T1135”, with that year’s tax return. Specified foreign property as...
Background: What is an NFT? A non-fungible token (NFT) is a unique digital asset that is built on top of the blockchain system. It is non-fungible in the sense that it is unique in nature: there is only one unique, original NFT. Cryptocurrencies (such as Bitcoin or Ethereum) or...
Background on Directors Liability for Taxes: The Tax Court of Canada has recently decided a case regarding director’s liability for unremitted GST/HST. Generally, a director of a corporation can be held personally liable to CRA for various corporate liabilities such as unremitted GST and HST, as well as unremitted...
Change in Use of Principal Residence, Principal Residence Exemption and Subsection 45(2) Election When there is a change in use of your principal residence, a deemed disposition occurs under subsection 45(1) of the Income Tax Act. The Canadian Tax Act states that a taxpayer will be deemed to have...
Introduction – Canadian Taxpayers Must Pay Departure Tax When Leaving Canada There are two types of individuals who must pay tax in Canada – Canadian residents and non-residents. Subject to various tax treaties and domestic tax rules, Canadian residents pay tax in Canada on their worldwide income while non-residents...
Introduction to Third-Party Tax Liabilities under Section 160 and Section 325 Section 160 of the Income Tax Act and Section 325 of the Excise Tax Act are derivative tax liability provisions. This means they empower the Canada Revenue Agency to pursue other people, third parties, for the unpaid income...