Tax Memo: Guarantee Fees: Tax Court of Canada Rules in Favour of GE Capital Canada Inc.

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On Friday, December 4, 2009, the Tax Court of Canada (TCC) ruled in favour of General Electric Capital Canada Inc. (GECC) and allowed the company to maintain deducted guarantee fees of $136 million for financial guarantees provided by its US-based parent company, General Electric Capital Corporation (GECUS) from December 31, 1996 to December 31, 2000. In the circumstances, the TCC observed the 1% guarantee fee as equal to or below an arm’s length price.

The PwC Tax Memo below shares the case’s history, key considerations that lead to the outcome and the firm’s observations on the proceedings. Download the PDF to read the details.