CALGARY, Alberta, June 08, 2020 (GLOBE NEWSWIRE) — Freehold Royalties Ltd. (Freehold or the Company) (TSX:FRU) previously announced that in 2019 it received a proposal letter from Canada Revenue Agency (CRA) wherein CRA stated that it intended to re-assess and deny Freehold’s deduction of certain non-capital losses claimed and carried forward in the tax returns filed for the years 2015 through 2018. Freehold has now received notices of reassessment (the Reassessments) from the CRA in which the CRA has denied the deduction of certain non-capital losses and other tax attributes in computing the Company’s income for taxation years ending in 2015 to 2018.
In issuing the Reassessments, the CRA is seeking to increase the Company’s income for Canadian tax purposes, which would result in federal and provincial taxes and interest of approximately $23 million. This amount includes an estimate for the provincial income tax and interest reassessments, which have not yet been received.
Freehold, in consultation with its advisors, believes that the Company has filed its tax returns, and paid applicable taxes, in compliance with Canadian tax law, and Freehold intends to vigorously and expeditiously defend its tax filing position. Freehold intends to file notices of objection with the CRA, within the required 90 day period provided for under the Income Tax Act (Canada), and will be required to pay a deposit forthwith of approximately $11.5 million representing 50% of the reassessed taxes and interest, pending the appeal process. In the event that Freehold is not successful in having the Reassessment overturned, Freehold has the right to appeal to the Tax Court of Canada.
For further information, contact:
Freehold Royalties Ltd.
Matt Donohue
Manager, Investor Relations and Capital Markets
t. 403.221.0833
f. 403.221.0888
tf. 1.888.257.1873
e. mdonohue@rife.com
w. www.freeholdroyalties.com