CRA confirms its position on “standard” convertible debentures

In 2013-0509061C6, CRA indicated that:

[T]he deemed payment of interest on standard convertible debentures under subsection 214(7) of the ITA that arises because of a transfer or assignment of standard convertible debentures by a non-resident person to a person resident in Canada (including the issuer of the debenture), does not generally constitute "participating debt interest". …

CRA is not inclined at this time to take the position that standard convertible debentures would in general constitute "excluded debt obligations" pursuant to paragraph 214(8)(c) of the ITA.

CRA confirmed that 2013-0509061C6 continues to represent CRA’s position.

Neal Armstrong. Summary of 2020 IFA-YIN Seminar on COVID-19 Guidelines, Q.16 under s. 212(3) – participating debt interest.