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IN THE COURTSISSUE 30 | JUNE 6, 2013THE AMERICASCanadaThe Supreme Court of Canada heard an appeal from acompany, DMI, that had sold two forest tenures, withboth sales agreements imparting upon the purchaserthe obligation to reforest the areas harvested. TheRevenue however assessed the company for the taxon the costs of reforestation under national law. Thecompany brought the issue to the Tax Court, whichstated that the reforestation obligation had been a partof the transaction and was included in the price paidby the purchaser. However, the Court ruled that thecompany was obliged to include in its proceeds theestimated cost of reforestation after 12 months followingthe sale, plus 20 percent of the remaining amount.The Federal Court of Appeal disagreed with thispoint and decided that the company should havebeen responsible for the entire estimated cost of reforestation,given that the amount was the valueincluded in the sales agreement. Likewise, becausea value was not agreed upon in the second sale, theCourt of Appeal recommended that the matter beconsidered again by the Tax Court.A listing of key international tax cases in thelast 30 daysgovernment to sell its forest tenures, and that to begranted permission the purchaser had to assumethe reforestation liability. Therefore the obligationwas tied to the sale of the tenures as a future expenserather than being separately included in theagreement, and the Supreme Court rejected theargument "that the purchasers' assumption of thereforestation obligations had to be added to DMI'sproceeds of disposition for income tax purposes."Th e Supreme Court was to consider whether thereforestation obligation was included in the pricepaid for the forest tenure, and if any meaning wasto be given to the specific value included in thefirst sales agreement. It pointed out that the companyhad to obtain permission from the provincialThe judgment was delivered on May 23, 2013.http://scc.lexum.org/decisia-scc-csc/scc-csc/scccsc/en/item/13071/index.doSupreme Court: Daishowa-Marubeni InternationalLtd. v. The Queen (SCC 29)89