Canada Supreme Court OKs Loblaw Companies’ Offshore Profits (1)

Canada’s top court on Friday rebuffed the federal tax agency’s bid to impose taxes on hundreds of millions of dollars made by an offshore subsidiary of Loblaw, the country’s largest retail chain.

In a unanimous decision, the Supreme Court dismissed the Canada Revenue Agency’s argument that the economic activities of Barbados-based Glenhuron Bank Ltd., owned by Loblaw Companies Ltd., fall under the foreign accrual property income, or FAPI, rules.

Those rules are the cornerstone of Canada’s legislation for fighting corporate tax avoidance. They allow the agency to enforce taxation on Canadian companies that earn passive income ...