The Tax Court of Canada has recently ruled on whether a Canadian Subsidiary of the Wendy's/Tim Horton group was allowed interest deductions for an intragroup loan made in 2002. The case involved a series of transactions between 18 March 2002 and 27 March 2002 as follows:
- Wendy's International Inc. ("Wendy's"), the ultimate parent of the group loaned CAD 234,000,000 (USD 147,654,000 US) to its U.S. subsidiary, Delcan Inc. ("Delcan") at an interest rate not to exceed 7 percent.
- Delcan in turn…