Canadian Appeals Court Holds Restructuring to Benefit from Tax Treaty with Luxembourg Not Subject to GAAR

A 12 February 2020 judgment of the Canadian Federal Court of Appeal has been published in the case of the Crown v. Alta Energy Luxembourg S.A.R.L. (Alta Luxembourg). The case concerns the application of Canada's general anti-avoidance rule (GAAR) to deny Alta Luxembourg from benefiting from the capital gains provisions of the 1999 Canada-Luxembourg tax treaty in relation to gains from the alienation of shares in a Canadian corporation, Alta Canada.

Alta Canada was formed in 2011 and acquire…