Tax Law

The Supreme Court of Canada will be hearing Copthorne Holdings Ltd. v. Her Majesty the Queen this coming Friday, January 21 at 9:30 a.m.  The appeal is concerned with interpreting various elements of the "general anti-avoidance rule" ("GAAR") of section 245 of the Income Tax Act.  

To seize the moment presented by the Copthorne Holdings appeal, the Tax Law Society at the Faculty of Law has arranged for an expert panel discussion of the issues raised by the appeal and the implications of the case for the GAAR more generally. The panel discussion will be held on Thursday, January 27 at 6:00 p.m. in the Bennett Lecture Hall at the University of Toronto Faculty of Law, which is located at 78 Queen's Park.

I will introduce the panel and provide some introductory background about the transactions and the judgment at the Federal Court of Appeal giving rise to the appeal to the Supreme Court of Canada.  Following this backgrounder, the discussion will be turned over to the panel members, each of whom will be given 10 minutes to speak, after which there will be an opportunity for questions from the floor. The distinguished panelists include:

I have posted a draft of a new working paper on SSRN. It is entitled, "Price Discrimination in Income Taxation: Defending Half-Hearted Anti-Avoidance" and is available for download now. Here is the abstract:

Governments throughout the developed world worry incessantly about the implications of sophisticated tax planning for their tax revenues. And yet the same governments routinely stop short of doing all that they can legally do to combat tax avoidance. Why? One response is that a thick conception of the rule of law constrains governments to adopt only certain kinds of responses to tax avoidance. Another response is that inherent structural limitations in tax administrative capacity or features of the political economy environment constrain the available responses to a subset of those that are possible de jure. Even considered jointly, however, the rule of law and political economy explanations do not provide an adequate account of the observed behavior of governments in the context of anti-avoidance. The main inadequacy is that the accounts fail to provide an explanation of the circumstances that will give rise to aggressive measures countering tax avoidance.

On December 16, 2011, the Supreme Court of Canada released its much-anticipated decision in Copthorne Holdings Ltd. v. Canada, in which the Court considered the General Anti-Avoidance Rule (GAAR) for the fourth time.

In contrast to its previous GAAR decision in Lipson, the Court arrived at a unanimous decision in Copthorne, applying the GAAR to a number of transactions designed to preserve paid-up capital and redeem shares on a tax-free basis. In order to review the decision and its implications, the University of British Columbia’s National Centre for Business Law and the University of Toronto Faculty of Law are co-sponsoring a symposium on Copthorne Holdings Ltd. and the Future of the GAAR, which will be held at the University of Toronto Faculty of Law on the afternoon of Friday, January 6, 2012.