Principal Issues: For the purposes of subparagraph 212(1)(d)(vi), does “a royalty or similar payment on or in respect of a copyright in respect of the production or reproduction of any literary, dramatic, musical or artistic work” include a payment for the right to use a copyrighted artistic work in connection with the manufacture, sale and distribution of products in Canada where the taxpayer ultimately only sells and distributes in Canada products that use that copyrighted work?
Position: Question of fact.
Reasons: Where a payor has entered into a legal agreement by which it has been granted the right to manufacture, sell and distribute products using the copyrighted property of the third party, a payment, to the extent it is a royalty or similar payment, made by the payor to the third party would be considered to be “on or in respect of a copyright in respect of the production or reproduction of any...artistic work” in subparagraph 212(1)(d)(vi) even if the payor does not manufacture any products using the copyrighted property itself.