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Do you need to be given a refund to have a refund? | Canadian Tax Decisions & Tax Law
Do you need to be given a refund to have a refund? Presidential MSH Corporation v The Queen, 2015 TCC 61 The only issue before the court was what the meaning of "dividend refund" in the context of the Refundable Dividend Tax On Hand (RDTOH) mechanism is. The Court concluded that the definition was textually and contextually ambiguous, but that the definition that required actual payment of the dividend was the only one consistent with the purpose of the provision and the ITA. NOTE: This is one of the many definitional problems that arise within the ITA and have prompted criticism by scholars and practitioners asking that the ITA be revised. It is this incoherence that, in part, makes tax avoidance possible for those with sufficient means to pay for the services of smart and creative tax lawyers. FACTS The taxpayer paid dividends in 2004, 2005, and 2006, and claimed a refund under ITA subsection 129(1). The MNR denied the refunds on the basis that the taxpayer had not filed its tax