| 17 May 2022 IFA Roundtable Q. 1, 2022-0933371C6 - Meaning of Habitual Abode |
Income Tax Act - Section 2 - Subsection 2(1) |
CRA residence test of “significant, secondary or other ties” |
| Treaties - Income Tax Conventions - Article 4 |
habitual abode determined in context based inter alia on relative stays and nature of activities |
| 17 May 2022 IFA Roundtable Q. 2, 2022-0926461C6 - Royalty Apportionment 212(1)(d)(vi) |
Income Tax Act - Section 212 - Subsection 212(1) |
CRA has authority to re-apportion where a royalty allocation is not “reasonable and realistic” |
| Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(vi) |
allocation by arm’s length parties of royalty between copyright and trademark must be “reasonable and realistic” |
| 17 May 2022 IFA Roundtable Q. 3, 2022-0926191C6 - Meaning of "goods" under 95(3)(b) |
Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(b) |
s. 95(3)(b) exclusion unavailable where foreign sub’s services were the marketing of condo sales by Canco |
| Income Tax Act - Section 95 - Subsection 95(3) - Paragraph 95(3)(b) |
condo inventory did not qualify as “goods” under s. 95(3)(b) |
| 17 May 2022 IFA Roundtable Q. 4, 2022-0931121C6 - PLOI Administrative Policies |
|
see more detailed summary at Notice to Tax Professionals (see also CRA provides for expanded PLOI election disclosure and permits PLOI elections to be made on loan-by-loan basis) |
| 17 May 2022 IFA Roundtable Q. 5, 2022-0928101C6 - Surplus Account Maintenance |
Income Tax Act - Section 113 - Subsection 113(1) - Paragraph 113(1)(d) |
s. 113 deductions denied if there is insufficient documentation to support the FA’s surplus computations (even where Pt. I tax computations do not depend thereon) |
| 17 May 2022 IFA Roundtable Q. 6, 2022-0929501C6 - Exempt Earnings and Residency Info |
Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Exempt Earnings - Paragraph (d) |
exempt surplus calculations must be supported by records showing that the FA’s CMC was exercised in a Treaty country |
| Income Tax Regulations - Regulation 5907 - Subsection 5907(11.2) - Paragraph 5907(11.2)(a) |
residence in country for Treaty purposes does not necessarily establish that its CMC is there |
| 17 May 2022 IFA Roundtable Q. 7, 2022-0926451C6 - Cryptocurrency reporting |
Income Tax Act - Section 233.3 - Subsection 233.3(1) - Specified Foreign Property - Paragraph (a) |
CRA is still reviewing whether and when cryptocurrencies may not be foreign property |
| 17 May 2022 IFA Roundtable Q. 8, 2022-0926431C6 - Foreign Entity Classification |
Income Tax Act - Section 248 - Subsection 248(1) - Corporation |
materials that should accompany an entity-classification ruling request |
| 17 May 2022 IFA Roundtable Q. 9, 2022-0926341C6 - Contemporaneous Docs and COVID-19 |
Income Tax Act - Section 247 - New - Subsection 247(4) |
no COVID extension of 6-month deadline under s. 247(4) to complete contemporaneous documentation |
| 17 May 2022 IFA Roundtable Q. 10, 2022-0926331C6 - Corporate Residence Approach |
Income Tax Act - Section 2 - Subsection 2(1) |
board meeting situs not determinative of CMC |
| 17 May 2022 IFA Roundtable Q. 11, 2022-0926411C6 |
Income Tax Act - 101-110 - Section 110 - Subsection 110(1.31) |
the non-qualified securities rules are being reviewed by Finance respecting options such as RSUs that can never generate a s. 110(1)(d) deduction |
| Income Tax Act - 101-110 - Section 110 - Subsection 110(1.4) |
requirement to issue s. 110(1.9) notice to employees re RSUs could be avoided by designating them as non-qualified securities under s. 110(1.4) |
| 17 May 2022 IFA Roundtable Q. 12, 2022-0926361C6 - Principal Purpose Test (PPT) |
Income Tax Act - Section 245 - Subsection 245(4) |
PPT approach can inform GAAR analysis |
| Treaties - Multilateral Instrument - Article 7 - Article 7(1) |
CRA is monitoring PPT compliance on a priority basis |
| 17 May 2022 IFA Roundtable Q. 13, 2022-0926381C6 - Statistics on MAPs |
Treaties - Income Tax Conventions - Article 26 |
around half of CRA’s recent MAP cases resulted in full relief |
| 17 May 2022 IFA Roundtable Q. 14, 2022-0926441C6 - Partnership and Subsection 90(3)Election |
Income Tax Act - Section 90 - Subsection 90(4) |
proposition applied (regarding a s. 90(3) PUC distribution election) that a partnership cannot be a related person |
Email this Content