Income Tax Severed Letters - 2017-07-26

Ministerial Correspondence

20 June 2017 Ministerial Correspondence 2017-0697751M4 - Deductibility of foreign online advertising

Unedited CRA Tags
19; 19.01; 19.1
issue that deductions for ads by Canadian advertisers on foreign websites are not limited by the ss. 19 to 19.1 rules is with Finance

Principal Issues: Is foreign online advertising deductible?

Position: Generally, foreign online advertising is deductible.

14 June 2017 Ministerial Correspondence 2017-0691521M4 - Deductibility of foreign online advertising

Unedited CRA Tags
19; 19.01; 19.1

Principal Issues: Is foreign online advertising deductible?

Position: Generally, foreign online advertising is deductible.

Technical Interpretation - External

28 June 2017 External T.I. 2016-0653921E5 F - Beneficiary/person beneficially interested

Unedited CRA Tags
70(3), 248(25), 248(1) particulier, personne, 104(1), 104(2)
a testamentary trust could be a beneficiary or beneficially interested in an estate
testamentary trust could be considered to have a right as beneficiary in estate

Principales Questions: Is a testamentary trust a beneficiary or a person beneficially interested in an estate for the purpose of subsection 70(3)?

Position Adoptée: It is a question of law and fact, but it is possible for a testamentary trust to be a beneficiary of an estate or a person beneficially interested in an estate pursuant to subsection 248(25).

Raisons: The term "beneficiary" in subsection 70(3), as well as the expression "beneficially interest" in subsection 248(25).

14 June 2017 External T.I. 2017-0687431E5 - Property Tax Deferral Program

Unedited CRA Tags
Ontario Taxation Act, 2007 - section 103.1, subsection 103.9(2), section 98, subsection 104.1(3), ss. 104.1(1.2.1), Ontario Municipal Act, 2001

Principal Issues: Can homeowners who join the XXXXXXXXXX include the property tax deferral amount in the calculation of the Senior Ontario Energy and Property Tax Credit or the Senior Homeowner's Property Tax Grant?

Position: No.

Reasons: One of the required factors that must be met in order to include property tax amounts in the calculation of the Seniors Property Tax Credit and the Seniors Property Tax Grant is that the municipal taxes must be paid by or on behalf of the individual (or the individuals qualifying spouse or qualifying common-law partner). Property taxes that are deferred by Homeowners who are part of the XXXXXXXXXX cannot be said to have paid by or on behalf of the homeowners and as such the property taxes that are deferred cannot be included in the calculation of the Seniors Property tax Credit or the Seniors Property Tax Grant.

6 June 2017 External T.I. 2016-0658351E5 - Stock dividends and safe income

Unedited CRA Tags
55(2), 55(2.2), 55(2.3), 55(2.4), 52(3)(a)
illustration of safe income streamed to preferred share stock dividend
safe income crystallized in basis when preferred share stock dividend paid

Principal Issues: How does the safe income of a corporation contribute to gains on the stock dividend shares and the shares upon which the stock dividend is paid?

Position: For shareholders who are individuals, a corporation’s safe income contributes to the stock dividend shares and the shares upon which the stock dividend is paid based on the relative gains inherent in the shares, as determined immediately after the stock dividend is paid. For corporations, the rules in subsection 55(2.3) and paragraph 52(3)(a) are relevant.

12 April 2017 External T.I. 2016-0642571E5 - Employee travel - board and lodging

Unedited CRA Tags
8(1)(h); 8(2)
logging employees working at a remote logging site unable to deduct their room and board fees

Principal Issues: Can employees of a logging company claim a deduction under paragraph 8(1)(h) of the Income Tax Act for amounts paid to their employer for board and lodging at a logging camp?

Position: Question of fact, but likely no.

Reasons: The board and lodging at the camp are not considered to be incurred exclusively for travel in the course of employment.