In 2012-0457741E5, the CRA confirmed that Canadian withholding and reporting obligations can potentially arise when two foreign corporations, holding taxable Canadian property, cease to exist in the course of a foreign amalgamation. In broad terms, a withholding and reporting obligation can arise in Canada under s. 116 where a non-resident “disposes of” taxable Canadian property (TCP), which generally includes Canadian real estate or resource property (or shares of a company that owns such property). Where two foreign corporations that own TCP amalgamate, the CRA will examine whether under the applicable foreign corporate law the amalgamating corporations legally cease to exist. In this latter event, the amalgamating corporations are considered to have “disposed of” their TCP – triggering the s. 116 obligations. Alternatively, the foreign corporate law may be similar to Canadian domestic law, where the amalgamating corporations legally “continue as one corporation”. In this event, the amalgamating corporations are considered not to have disposed of any property. In Black & Decker Manufacturing Co. [1975] 1 S.C.R. 411, the Supreme Court of Canada said that in a Canadian amalgamation “…the amalgamating companies continue without subtraction in the amalgamated company, with all their strengths and their weaknesses, their perfections and imperfections, and their sins, if sinners they be”. The full implications of this “continuation principle” from a Canadian tax perspective will be examined shortly by the Supreme Court of Canada in Envision Credit Union v. The Queen, which is scheduled to be heard on March 19, 2013.