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Treaty shopping not abusive; GAAR can’t be applied to deny DTAA relief: Canadian Federal Court

May 30, 2020[2020] 116 856 (FC - Canada)

INTERNATIONAL TAXATION: No abuse arises from choice of most beneficial treaty; selection of a low tax jurisdiction may speak of an alleged avoidance transaction, but shopping or selection of a treaty to minimize tax on its own cannot be viewed as being abusive

• Canada has, as per Luxemberg Convention, surrendered its right to tax gains derived by a resident of Luxembourg from sale of shares of a private corporation if value of such shares is derived principally from immovable property (other than rental property) situated in Canada in which business of corporation is carried on.

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