Income Tax Severed Letters - 2024-01-17

Ruling

2024 Ruling 2019-0817961R3 - Swiss Collective Investment Scheme

Summary Under
Tax Topics - Treaties - Income Tax Conventions - Article 10
Swiss collective investment vehicle treated as flow-through for purposes of the pension/ retirement fund dividend exemption in the Canada-Swiss treaty
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1)
Swiss collective investment entity treated as a flow-through for Canadian withholding tax purposes

Principal Issues: Canadian tax treatment of dividends paid on Canadian securities that are part of the assets of a particular Swiss Collective Investment Scheme taking the form of a contractual fund.

Position: Such dividends will be exempt from Canadian tax imposed by paragraph 212(2) of the Act by virtue of subparagraph 3(b) of Article 10 of the Treaty.

Reasons: Based on position taken in XXXXXXXXXX.

2020 Ruling 2019-0817051R3 - Reorganization

Unedited CRA Tags
89(1) "paid-up capital", 85(2.1), 86(2.1), 84(4), 84(4.1), 212.1, 245
Summary Under
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Paid-Up Capital
transactions to increase PUC of shares of Cdn parent in sub before re-domestication of parent
Summary Under
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(4)
s. 111(4)(e) step-up and drop-down of royalty interest used to step up the PUC of Canco sub of Canco parent before parent continued to US under s. 128.1(4)

Principal Issues: (i) Whether amounts could be added to paid-up capital as a result of the described transactions; (ii) whether GAAR should apply to deny the increases in paid-up capital.

Position: See below.

Reasons: See below.