Does CRA accept Bagtech? After referring to the position in ITTN no. 44) that "unanimous shareholder agreements are not to be considered in applying paragraph (b) of the definition ‘Canadian-controlled private corporation'" in s. 125(7), CRA stated:
The interpretation that the CRA had given to the Duha case in the documents referred to above cannot be reconciled with the interpretation of that case by the Courts in Bagtech. In determining if a shareholder has de jure control, the CRA will adopt the views of the Court in Bagtech where appropriate in determining which shareholder or group of shareholders has "effective control" (paragraph 36 of the Duha case) or "long run" control (Donald Applicators Ltd. et al v MNR, 69 DTC 5122) of the corporation in light of the applicable provisions of the Act.