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Archive for October 4, 2009
CRA foiled in Tax Grab.
October 4, 2009 by Dan White.
CRA foiled in Tax Grab.
Alberta Power foils the tax man who tried to claim that the sale of an asset was “income” but fortunately Alberta Power had the financial strength to fight CRA in Tax Court and justice prevailed.
Alberta Power (2000) Ltd. (Alberta Power), a subsidiary of ATCO Ltd. (ATCO), has received confirmation from the Tax Court of Canada ordering Canada Revenue Agency (CRA) to reverse its 2006 reassessment of Alberta Power’s 2001 tax return.
The impact of the judgment is a $13.7 million recovery of income tax and related interest expense reassessed by CRA in 2006. In addition, Alberta Power will receive interest income of approximately $3.1 million earned on such amounts paid to CRA. These adjustments will result in a $8.8 million increase in ATCO earnings after non-controlling interests. CRA will be required to refund to Alberta Power approximately $28.0 million including interest and net of consequential adjustments to other taxation years arising from the judgment.
The reassessment treated the proceeds received from the sale of the H.R. Milner generating plant to the Alberta Balancing Pool as income rather than as a sale of an asset. Alberta Power successfully argued that its treatment of the proceeds as a capital receipt was correct.
Dan White
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