Bo On Dividends Paid By Prevost Case Analysis

The issue in this case was whether PHBV was the BO on dividends paid by Prevost. This court has considered the “BO” meaning under an OECD tax treaty and used a form over substance approach to determine whether PHVB is the holding company for Prevost.

The tax authority argued that the PHBV was not the BO of dividends received from Prevost. However, the court disagreed by relying on Canada’s domestic law definition of BO as “the person who “receives the dividends for his or her own use and enjoyment and assumes the risk and control of the dividend received”, thus reasoned that PHBV had complete control over the dividends. The court was convinced that prior to distribution of the dividends to the shareholders, PHBV held the monies represented