Canada vs General Electric Capital Canada: JUDGMENT
Case Information
- Court: Federal Court of Appeal
- Case No: A-1-10
- Applicant: Her Majesty the Queen
- Defendant: General Electric Capital Canada Inc. (GE Canada)
- Judgment Date: 15 December 2010
The case of Canada v. General Electric Capital Canada Inc. (2010 FCA 344) revolved around whether guarantee fees paid by GE Canada to its parent company, GECUS, adhered to the arm’s length principleThe Arm’s Length Principle (ALP) is a cornerstone concept in international taxation and transfer pricing. It requires that transactions between related parties, such as subsidiaries or affiliates within a multinational enterprise (MNE), mirror those that would occur between independent entities under similar circumstances. This principle ensures that each entity within an MNE is compensated fairly and transparently, based on the... under Canadian tax lawTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public.... GE Canada claimed deductions for these fees in its income calculations for the 1996–2000 taxation years. The Minister of National Revenue reassessed these deductions, arguing that the fees exceeded arm’s length amounts and provided no tangible benefit to GE Canada, and thus were superfluous.