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ARTICLE · 29 JANUARY 2015

Rectification Is About Intention – Not Interpretation

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The Ontario Superior Court of Justice recently granted rectification in a case in which the CRA and the taxpayer differed in their interpretation and effect of a particular document.

CanadaTax
David Wahl
David Wahl
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The Ontario Superior Court of Justice recently granted rectification in a case in which the CRA and the taxpayer differed in their interpretation and effect of a particular document. In Kaleidescape Canada Inc et al v Computershare Trust Company of Canada et al, 2014 ONSC 4983, the Court was asked to determine whether the parties intended that Kaleidescape Canada Inc. remain a Canadian-controlled private company (CCPC) for the purposes of obtaining certain scientific research and development tax credits under the Income Tax Act (Canada).

Facts

Kaleidescape Canada Inc. (KCI) is a research and development company located in Ontario. KCI was structured as a "deadlock" corporation so that it would not be controlled by a non-resident and therefore would qualify as a CCPC.

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