4 July 2000 External T.I. 2000-0034015 - Capital Cost Allowance and M&P

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether a proposed deep water cooling project is manufacturing and processing of goods for sale and whether the "pipe" to be used in the project qualifies for the enhanced capital cost allowance announced in the February 28, 2000 budget?

Position: Question of fact.

Reasons: This can only be determined in the context of an advance income tax ruling and actual draft legislation.

A. Seidel
XXXXXXXXXX 						(613) 957-8974
							2000-003401
Attention: XXXXXXXXXX 

July 4, 2000

Dear Sir:

Re: Deep Water Cooling Project

This is in reply to your letter dated June 26, 2000 concerning a proposed deep water cooling project. You have requested confirmation that the project would constitute manufacturing and processing of goods for sale and that certain "pipes" would qualify for enhanced capital cost allowance as announced in the February 28, 2000 budget.

The project described in your letter, and in the attachment thereto, describe a specific proposed transaction. To the extent that you require confirmation of the tax consequences for any of the proposed transactions involving this specific project, we bring to your attention Information Circular 70-6R3 ("IC 70-6R3") dated December 30, 1996 issued by Revenue Canada. Confirmation with respect to proposed transactions involving specific taxpayers should be the subject of a request for an advance income tax ruling. If you wish to obtain an advance income tax ruling for particular taxpayers with respect to specific contemplated transactions, a written request for an advance income tax ruling should be submitted in accordance with IC 70-6R3. In addition to the information outlined in IC 70-6R3, your request should include copies of any feasibility studies related to the proposed project and any other reports or written materials that describe the project and activities involved in the project such as annual reports, public announcements, submissions to XXXXXXXXXX, requests or applications for permits, etc.

To date, the Department of Finance has not released any draft legislation in respect of the February 28, 2000 budget announcement concerning amendments to enhance the capital cost allowance provisions in respect of certain depreciable property. Without such draft legislation, we are unable to provide you with any comments as to whether or not the particular "pipe" you are proposing to use in your proposed project would qualify for any enhanced capital cost allowance as contemplated in the February 28, 2000 budget.

Yours truly,

for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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