It’s extremely common to be taxed on “deemed” transactions in Canada and Europe. In other words, to owe tax when you don’t even have the capital to pay for that tax.
One very common example is when someone tries to break residency in their home country. You get taxed on the fair market value of nearly everything you own on date of termination of residency, because of a deemed disposition, whether the asset is liquid or not. Several founders have been devastated by that when leaving Canada to say go to Silicon Valley. They are on the hook for tax on their private company, illiquid shareholdings and there are not any real relief provisions absent you giving up the shares of your business before you leave.
As for this idea to use common sense, as a tax professional, common sense is that unless there are SPECIFIC provisions that say so, EVERY transaction is a taxable event. Stock dividends (whether as part of a split or not) are an acquisition of a new asset, and on paper, represent a conferral of a benefit to a shareholder. That would generally be a taxable event.
Fortunately, Canada has specific interpretations that seem to give us some relief in a split scenario. Absent that, we would have been deemed to acquire 4 new shares at their fair market value (not at 0.01, but at closing prices on 28/5), and we would not be deemed to dispose of our 1 share to offset the inclusion.
I can’t say that all our European friends will be in the same boat. So, I would suggest avoiding the generalities. Tax isn’t common sense. Tax codes in Europe were written centuries before those in the US (and are not modernized). US is actually one of the “younger” tax codes, and is one that is structured extremely differently than most other countries.