CRA supports broad interpretation of the copyright royalty exemption from Part XIII tax

CRA has indicated that it considers the s. 212(1)(d)(vi) exemption from Part XIII withholding tax to encompass any copyright royalties paid in respect of a work (other than film, which is excluded under s. 212(5)).  It appears to be inherent in this view that the words "production or reproduction" in s. 212(1)(d)(vi) have a broader meaning than  their more specialized meaning in copyright law.  As found in ESA v. SOCAN, s. 3(1) of the Copyright Act distinguishes between reproduction and performance rights,  so that copyright royalties paid in respect of performance rights are not considered to be in respect of production or reproduction rights.

Scott Armstrong.  Summary of 3 May 2011 IFA Roundtable 2011-0404511C6 under s. 212(1)(d)(vi).