Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: whether a taxpayer is "entitled" or "can reasonable be expected" in the year to "receive" a tax credit (government assistance) where it has no tax payable
Position: Audit should formulate position
Reasons: actual past transactions, Audit is responsible for administering SR&ED program
Denise Dalphy, LL.B.
XXXXXXXXXX (613) 941-1722
2002-013463
October 21, 2002
Dear XXXXXXXXXX:
Re: XXXXXXXXXX
Request for a Technical Interpretation
This is in reply to your letter dated April 4, 2002 wherein you requested our views on subsection 127(18) of the Income Tax Act (the "Act") where a corporation that otherwise would be entitled to receive a provincial scientific research and experimental development income tax credit in a year, cannot use that credit because it does not have any tax payable in that year.
Written confirmation of the consequences inherent in particular transactions is given by the Income Tax Rulings Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5 (the "Circular"). Where the particular transactions are completed or partially completed, the enquiry should be addressed to the relevant Tax Services Office. We have consulted with the Scientific Research and Experimental Development (SR & ED) Directorate, which is part of the Compliance Programs Branch of the Canada Customs and Revenue Agency, on this matter. It is responsible for delivering the SR & ED tax-based incentives to all SR & ED performers, while encouraging self-compliance with the SR & ED legislation. Based on the foregoing, it is our view that a response to your request for an interpretation of subsection 127(18) of the Act should be provided by the SR & ED Directorate, and not the Income Tax Rulings Directorate. Accordingly, we have forwarded your letter to Mr. Mel Machado, Manager, SR & ED Directorate, so that he may consider your submission and provide you with a response.
Yours truly,
Steve Tevlin
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
c.c.: Mr. Mel Machado
Senior Manager, SR & ED Directorate
Mr. Bob McLeod
Large Case File Manager
Vancouver TSO
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