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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