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.
Principal Issues: What is CRA's position in respect of withholding requirements on cross-border payments in respect of a copyright of a literary, dramatic, musical or artistic work?
Position: While we are undergoing an in depth review of relevant sources we will be following the position set out in paragraph 3 of IT-303SR-- all payments in respect of the copyright of a literary, dramatic, musical or artistic work are not subject to withholdings unless that payment is for a right referred to in subsection 212(5) of the Act.
IFA 2011 Question
Question: Subparagraph 212(1)(d)(vi)
On September 19, 1985 Interpretation Bulletin -303SR (Special Release) entitled “Know-how and similar payments” was released. Paragraph 3 of the SR stated that all payments in respect of a copyright of a literary, dramatic, musical or artistic work were exempt from withholding tax pursuant to subparagraph 212(1)(d)(vi) of the Act. Since that Special Release the Income Tax Rulings Directorate has issued a number of opinions which generally concluded that the exemption in subparagraph 212(1)(d)(vi) was limited to payments which are considered under the Copyright Act of Canada to be in respect of a production or reproduction of a literary, dramatic, musical or artistic work. Since the SR has not been archived or revised it appears the Agency has inconsistent positions currently published.
Could you please clarify what CRA’s position is in respect of cross-border payments in respect of a copyright or a literary, dramatic, musical or artistic work?
CRA Response:
The Agency is currently following IT-303SR and at this time, pursuant to subparagraph 212(1)(d)(vi) of the Act, will not be reassessing to tax under Part XIII any payments in respect of a copyright of a literary, dramatic, musical or artistic work (unless it is payment that falls under subsection 212(5) of the Act). As such any payments in respect of the copyright of a literary, dramatic, musical or artistic work, including the right in respect of the translation, performance, telecommunication or broadcast of one of the aforementioned works will not be subject to withholding tax unless that payment is for a right in or the use of a motion picture film or a film or video tape for use in connection with television that is to be used or reproduced in Canada.
Shelley Helmer
2011-040451
May 2011
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