1144020 Ontario Ltd. v. Her Majesty the Queen

Date Closed

July 05, 2008

Lead Office


In 2005, the taxpayer, 1144020 Ontario Ltd., purchased, renovated and operated two hotels. The taxpayer paid amounts to three non-residents for services rendered. It was the taxpayer’s position that the amounts paid were in respect of the acquisition, renovation and operation of the hotels. The Minister of National Revenue reassessed the taxpayer to disallow the deduction of the amounts on the basis that the amounts were not business deductions to the taxpayer, but the Minister also levied tax pursuant to Part XIII with respect to some of the payments. Ultimately, the parties came to an agreement with respect to deductibility and the Part XIII taxability. The Minister reassessed accordingly, and on July 5, 2008, the taxpayer withdrew its appeal.

McCarthy Tétrault LLP represented the applicant with a team led by Edwin Kroft.