Canadian Tax Court Holds Gains on Shares Deriving Value from Oil and Gas Rights are Exempt under Tax Treaty with Luxembourg

The Tax Court of Canada issued a judgment on 22 August 2018 concerning whether gains from the transfer of shares deriving value from oil and natural gas rights situated in Canada are exempt under the Canada-Luxembourg tax treaty. The case involved Alta Energy Luxembourg S.a.r.l. (Alta Energy), which sold the shares of its wholly-owned subsidiary, Alta Energy Partners Ltd. (Alta Canada), to Chevron in 2013.

Alta Canada principally derived value from licenses and leases held in nearly 68,000 …