3 Principles of Tax Interpretation

Canadian Tax Fundamentals · 2:51

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Lyrics

[Verse 1]
When judges read the Income Tax Act today
They follow rules that guide them on their way
First comes textual, what the words declare
Then contextual, how they fit with care
Purposive follows, what's the true intent
Canada Trustco made the method bent

[Chorus]
Three approaches working hand in hand
Textual, contextual, purposive stand
Read the words then see how they relate
Find the purpose, don't interpretate
Tax Court starts it, Federal Appeal
Supreme Court ends it, that's the real deal

[Verse 2]
Section two-four-five is GAAR's domain
General Anti-Avoidance stops the game
When taxpayers use arrangements that abuse
The Act's purpose, GAAR will cut them loose
Artificial transactions, tax benefits sought
If it lacks substance, your plan comes to naught

[Chorus]
Three approaches working hand in hand
Textual, contextual, purposive stand
Read the words then see how they relate
Find the purpose, don't interpretate
Tax Court starts it, Federal Appeal
Supreme Court ends it, that's the real deal

[Bridge]
Form versus substance, which one will prevail
Look past the structure to the true detail
Tax Court of Canada hears the first round
Federal Court of Appeal, second ground
Supreme Court of Canada gets the final say
Three levels guide us through the legal way

[Verse 3]
Don't just follow what the form displays
Look to substance in these modern days
Courts will pierce through artificial schemes
To find the truth behind financial dreams
Integration guides interpretation's art
Economic substance plays the vital part

[Chorus]
Three approaches working hand in hand
Textual, contextual, purposive stand
Read the words then see how they relate
Find the purpose, don't interpretate
Tax Court starts it, Federal Appeal
Supreme Court ends it, that's the real deal

[Outro]
Remember Trustco's wisdom, GAAR's might
Form and substance in the legal light
Three courts climbing justice's long stair
Canadian tax interpretation with care

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