Tax - Income tax - Foreign income
During 2012 taxation year, taxpayer was citizen and resident of US. In 2012, taxpayer earned $26,244.00 of income in Canada from provision of services to corporation. In US, taxpayer earned $233,197.00 of business income through his membership interest in US limited liability company. Through membership, during same year, taxpayer also earned US $46,143.00 in royalties. Minister found that amount of $26,244.00 earned by taxpayer was taxable in Canada. Taxpayer’s appeal from Minister’s assessment was dismissed. Tax Court judge found that when US resident carried on business through permanent residence in Canada, business profits of US resident that were attributable to Canadian permanent establishment were taxable in Canada. Tax Court judge found that Taxpayer provided engineering services as independent contractor to corporation. Taxpayer therefore had business in Canada that consisted in providing engineering services with respect to design of fuel lines for aircraft. Tax Court judge found that payments received by taxpayer were revenues for taxpayer’s enterprise. Taxpayer appealed with Federal Court of Appeal. Appeal dismissed. Taxpayer did not point to anything in record that would support any finding of when revenue was earned in US. Taxpayer failed to establish that Tax Court judge made any palpable and overriding error in finding that there was insufficient evidence for him to conclude that 50 percent or less of gross active business income from taxpayer’s enterprise was earned in Canada.
Wolf v. Canada (2019), 2019 CarswellNat 6303, 2019 FCA 283, Wyman W. Webb J.A., Richard Boivin J.A., and Donald J. Rennie J.A. (F.C.A.); affirmed (2018), 2018 CarswellNat 2777, 2018 CarswellNat 7496, 2018 TCC 84, 2018 CCI 84, Sylvain Ouimet J. (T.C.C. [General Procedure]).
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