Canada’s Top Court Sides With Alta Energy in Tax Treaty Clash

Nov. 26, 2021, 3:27 PM

Canada’s top court dismissed arguments from the country’s tax agency Friday that a company can only move profits through a tax treaty if the firm has a substantive presence in the other treaty country.

The Supreme Court of Canada denied an appeal from the Canada Revenue Agency seeking to bar U.S. companies from shifting profits made through a subsidiary in Canada to another firm owned in Luxembourg using a tax treaty with the small European country.

In a 6-3 decision, the court said the company didn’t breach anti-avoidance rules by using an exemption in the treaty to shift its profits, ...

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