On May 23, 2013, the Supreme Court of Canada issued its decision in Daishowa-Marubeni International Ltd. v. The Queen, dealing with the vendor’s tax treatment of future obligations (such as reclamation obligations) that are assumed by a purchaser of assets.
The Court concluded (in a resource context) that the future obligation is part of and inseparable from the purchased rights and, therefore, not added to the taxable consideration. This decision is relevant to all M&A transactions, but particularly relevant to the mining industry.
A summary from Cassels Brock is HERE.
Posted by Scott Sinclair, Range Advisors
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