Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Dear Sirs:
This is in reply to your letter of March 18 concerning Article XIIIC of the Canada-U.S. Income Tax Convention (1942).
We agree that the provisions of the said Article XIIIC exempt from tax, otherwise imposed by subsection 212(5) of the Income Tax Act, payments made for the right in or to the use of a videotape for use in connection with television broadcasting.
The above mentioned exemption does not, however, apply to videotapes of motion picture films. In this context, it is your view that the exemption should continue to apply if "a motion picture is first filmed and then transferred to video tape for editing and other production and post-production work, with the final version remaining on video tape for use in connection with television". We agree with your view provided that no commercial exploitation of the film as such was intended or in fact took place-. This is a question of fact and each case would have to be decided on its own merits.
We trust that the above comments will be of assistance.
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© Her Majesty the Queen in Right of Canada, 1985
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© Sa Majesté la Reine du Chef du Canada, 1985
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