Global Tax Adviser
February 2010

FMC Technologies – Non-Resident WHT Catch-22 Upheld

Paul Hickey
National Tax Centre, Toronto

The Supreme Court of Canada (SCC) dismissed the taxpayers' application for leave to appeal in FMC Technologies Company v. The Queen (2009 FCA 217). In this case, a Canadian resident corporation effectively paid $2.8 million in tax twice (15 percent of $18.8 million earned income): once as tax under Part I and then again under Part XIII as a withholding tax indemnification to another Canadian corporation.

The Federal Court of Appeal (FCA) upheld the Federal Court's (FC) decision and found that the Canadian taxpayer, which was trying to rectify the situation, was challenging a withholding tax assessment levied on another taxpayer and that it did not, in law, overpay its own taxes. As a result of the SCC's refusal to grant leave, the FCA's decision that the taxpayer is not entitled to a refund of the $2.8 million stands.

For more information, contact your KPMG Tax adviser.

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