Taxation Issue: The appeal concerned the interpretation of subsection 20(12) of the Income Tax Act, focusing on taxes paid by Emergis Inc. to the U.S. Government on interest paid by a partnership to Emergis, a corporation resident in Canada.
Withholding Taxes: Emergis paid withholding taxes in 2000 and 2001 on interest payments it received from a partnership.
Deduction Claim: Emergis claimed a deduction for these withholding taxes.
Initial Decision: The Minister of National Revenue denied the deduction, and the Tax Court dismissed Emergis' appeal.
Court's Decision:
The Federal Court of Appeal allowed Emergis Inc.'s appeal, overturning the previous decisions which had denied the deduction claim??.
