For a lease to be deemed valid by the CRA for tax purposes, the purpose of the lease must NOT be primarily for the purpose of tax avoidance.

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The Canada Revenue Agency (CRA) requires that transactions, including leases, have a bona fide purpose beyond merely tax avoidance for them to be considered valid for tax purposes. Transactions primarily aimed at tax avoidance may be challenged under the General Anti-Avoidance Rule (GAAR).

For a Lease to Be Deemed Valid by the CRA