Canada vs Univar Canada Ltd., November 2005, Tax Court of Canada, Case No 2005 TCC 723

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The CRA had issued a six assessments for fiscal years 1995-1999 based on the principle purpose of Univar's acquisition of shares of Van Waters & Rogers (Barbadosco) Ltd. being to permit Univar to avoid, reduce or defer the payment of tax that would otherwise be payable under the Act within the meaning of paragraph 95(6), and thus deemed not to have been acquired .

"ITA 95(6) Where rights or shares issued, acquired or disposed of to avoid tax – For the purposes of this subdivision (other than section 90),
(b) where a person or partnership acquires or disposes of shares of the capital stock of a corporation, either directly or indirectly, and it can reasonably be considered  that the principal purpose for the acquisition or disposition of the shares is to permit a person to avoid, reduce or defer the payment of tax or any other amount that would otherwise be payable under this Act, those shares shall be deemed not to have been acquired or disposed of, as the case may be, and where the shares were unissued by the corporation immediately prior to the acquisition, those shares shall be deemed not to have been issued."

The Amended Judgement from the Court
The appeal from the six reassessments made under Part I of  the Income Tax Act with respect to the following taxation years is allowed and the reassessments are referred back to the Minister  of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment:
With respect to the six reassessments, it cannot, under paragraph 95(6)reasonably be considered that the principal purpose for the acquisition of the shares of Barbadosco was to permit the Appellant to avoid, reduce or defer the payment of tax or any other amount that would otherwise be payable under the Act.

 

Canada vs Univar May 9 2005_TCC_723

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