Ottawa-The Canadian Supreme Court upheld Rob Lowe Financial Holdings in a dispute over the tax treatment of its subsidiary in Barbados.
In today’s 7-0 decision, the Supreme Court states that the Canadian provisions in question in this case did not apply to a company called Glenhuron Bank Ltd. That is, no income tax was paid in Canada.
The minister issued a reassessment to Rob Lowe Financial, demanding that Glen Huron’s income be taxed for several years because of the provisions.
The Federal Tax Court agreed with the Minister in 2018, and Glen Huron’s income was not subject to the exclusions given to foreign banks.
The court concluded that Glenhuron did business primarily with affiliated companies, rather than with the parties involved in business-to-business transactions, as required by law.
The exception to the law was actually applied because the Supreme Court unanimously concluded that most of the business was conducted between Rob Lowe Financial’s foreign affiliates and arm-length parties.
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