This commentary was prepared by Wilson & Partners LLP, a law firm affiliated with PricewaterhouseCoopers.
The Tax Court of Canada (TCC) decision in Prévost Car Inc. v. The Queen provides valuable guidance on how receptive the courts are likely to be when the Canada Revenue Agency (CRA) challenges some international structures.
In recent years the CRA has stated its intention to challenge international structures that result in reduced or nil withholding tax on dividends, interest or royalties from Canada, or other treaty benefits. Especially likely to attract attention are structures that involve an "intermediary company" that does not have significant activities or other assets.
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