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CIBC in tax battle with CRA

CIBC in tax battle with CRA

CIBC in tax battle with CRA over alleged ‘dividend rental arrangements’

Source: Financial Post
Author: Geoff Zochodne

The Canadian Imperial Bank of Commerce is fighting a tax reassessment that could cost it hundreds of millions of dollars after it was accused by Canada’s tax authorities of improperly deducting dividend income received as part of an alleged “dividend rental arrangement.”

CIBC said in second-quarter filings released Wednesday that the Canada Revenue Agency had reassessed it for approximately $298 million of additional income tax, denying the deductibility of certain Canadian company share dividends claimed in 2011 and 2012 that were part of the alleged arrangement.

The bank also said it had in March filed a notice of appeal with the Tax Court of Canada in connection with its 2011 tax year, which aims to have a CRA reassessment vacated.

“CIBC is confident that its tax filing positions were appropriate and intends to defend itself vigorously,” the bank said. “Accordingly, no amounts have been accrued in the interim consolidated financial statements.”

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