The FCA has ruled against the Bank of Montreal (“BMO”) (2021 FCA 189) in its challenge of the Minister’s decision to deny BMO’s input tax credit (“ITC”) allocation methodology under section 141.02(18) of the Excise Tax Act. This will likely be bad news for certain institutions that elect to use their own methods for allocating ITCs within complex corporate groups.
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As with have blogged about many times in the past (see here, here, here, and here), one of the most misunderstood areas of the law around corporate directors is the concept of director’s liability for the corporation’s unremitted tax.
Several recent cases in our practice have reminded us of the critical importance of these rules and how all directors can benefit from a refresher of their basic structure.
The Government of Ontario has now made a long-hoped for change to the Ontario Business Corporations Act (“OBCA”) removing the director residency requirement effective July 5, 2021.
This means that corporations incorporated or continued into Ontario no longer need to have any Canadian resident directors and will help put Ontario on a level playing field with provinces like British Columbia which have been without a director residency requirement for nearly two decades!
Quebec has special rules regarding the mandatory disclosure of “nominee agreements” (which are essentially the Quebec civil law equivalent of undisclosed agency agreements) where the agreement is made as part of a transaction or series of transactions that have “tax consequences”.
We previously blogged about a Tax Court of Canada (TCC) case on the tax status of credit card/payment processing services provided by Visa. In that case, the TCC held that Visa’s services constituted the supply of “administrative services” and were therefore excluded from the definition of a “financial service” in subsection 123(1) of the Excise Tax Act (ETA).
The Federal Court of Appeal (FCA) has now reversed the TCC decision, holding that Visa’s services were in fact exempt financial services.