ARTICLE · 11 MARCH 2009

FMC Team Prevails In "Beneficial Owner" Case

Dentons Canada LLP

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On Thursday, February 26, 2009, the Federal Court of Appeal reaffirmed the importance of "certainty and stability" in the interpretation of bilateral income tax treaties with the release of its decision in The Queen v. Prévost Car, Inc. The Federal Court of Appeal unanimously upheld the lower court's decision that a Dutch holding company was the "beneficial owner" of dividends received from its Canadian subsidiary for purposes of the tax treaty between Canada and the Netherlands.

CanadaTax

Chia-Yi Chua

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On Thursday, February 26, 2009, the Federal Court of Appeal reaffirmed the importance of "certainty and stability" in the interpretation of bilateral income tax treaties with the release of its decision in The Queen v. Prévost Car, Inc. The Federal Court of Appeal unanimously upheld the lower court's decision that a Dutch holding company was the "beneficial owner" of dividends received from its Canadian subsidiary for purposes of the tax treaty between Canada and the Netherlands. Please click here for prior coverage of the lower court's decision. In so doing, the Court refused to adopt the ambiguous and flexible meaning of "beneficial owner" put forward by the Canada Revenue Agency.

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