Holding Company And Input Tax Credits "In Relation To" A Subsidiary

Miedzi Copper Corporation v. Her Majesty The Queen (2015 TCC 26) is the most recent case from the Tax Court of Canada to address whether a Canadian holding corporation could claim input tax credits ("ITCs") for GST/HST paid on certain expenses where the holding company's only activity consisted of hold shares in a related corporation. 

The taxpayer's appeal was allowed in its entirety.

Miedzi was a Canadian corporation based in Vancouver and a GST/HST registrant.  It was a holding company that carried on a mineral exploration business through a wholly-owned foreign subsidiary resident in Luxembourg ("Luxco").  Luxco owned six mineral exploration companies that operated in Poland.  Miedzi raised money through private placements which it used to finance the exploration projects by way of loan to Luxco who, in turn, would loan it down to the Polish companies.