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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Does the expression "société canadienne imposable" used in subparagraph b)ii) of the definition of "dépense de main-d'œuvre" (Labour Expenditure) in subsection 125.4(1) of the French version of the Act refers to the expression defined in subsection 89(1) of the Act or to the one defined in subsection 1106(2) of the proposed Income Tax Regulations?
Position: The expression "société canadienne imposable" has the meaning assigned by subsection 89(1).
Reasons: In the French version of the Act, the definition of "société canadienne imposable" in subsection 1106(2) of the proposed Income Tax Regulations is applicable only for the purposes of the definition of "société admissible" (qualified corporation) in subsection 125.4(1) of the Act and for section 1106 of the proposed Regulations. Therefore, for the purposes of the definition of "dépense de main-d'oeuvre", the expression "société canadienne imposable" can only refer to the expression defined in subsection 248(1) which refers to subsection 89(1) of the Act.
XXXXXXXXXX 2001-009914
N. Deslandes, CGA
April 5, 2002
Dear XXXXXXXXXX:
Re: Technical Interpretation Request: Labour Expenditure - Subsection 125.4(1)
We are writing in reply to your facsimile of August 30, 2001, requesting our opinion concerning the definition of "labour expenditure" in subsection 125.4(1) of the Income Tax Act (the "Act"). We apologize for the delay in responding to your letter.
More precisely, you are requesting a confirmation that the expression "société canadienne imposable" used in subparagraph b)ii) of the definition of "dépense de main-d'oeuvre" in subsection 125.4(1) of the Act refers to a "société canadienne imposable" as defined in subsection 89(1) of the Act.
In the French version of the Act, the expression "société canadienne imposable" is defined in subsection 248(1) which refers to the meaning assigned by subsection 89(1) of the Act. This expression is also defined in subsection 1106(2) of the proposed Income Tax Regulations (the "proposed Regulations"). In the proposed Regulations, the expression "société canadienne imposable" requires the corporation to be "Canadian" as defined in subsection 1106(1) of the proposed Regulations. The English version of the Act seems to be more precise as it is using two expressions that are "prescribed taxable Canadian corporation" in subsection 1106(2) of the proposed Regulations and "taxable Canadian corporation" in subsections 248(1) and 89(1) of the Act.
The wording of the French version of subsection 1106(2) of the proposed Regulations differs from the English version. The French version provides that: "Pour l'application de la définition de " société admissible " à l'article 125.4 de la Loi et du présent article, est une société canadienne imposable...". The English version provides that : " For the purposes of section 125.4 of the Act and this section, "prescribed taxable Canadian corporation" means.. ".
In the French version, the definition of "société canadienne imposable" in subsection 1106(2) of the proposed Regulations is only applicable for the purposes of the definition of "qualified corporation" in section 125.4 of the Act and for section 1106 of the proposed Regulations. Therefore, we agree with your position that the expression "société canadienne imposable" used in the definition of "dépense de main-d'oeuvre" can only refer to the meaning assigned to that expression in subsection 89(1) of the Act and that there is no requirement for that corporation to be "Canadian" as defined in subsection 1106(1) of the proposed Regulations.
We trust the above comments are of assistance to you.
Yours truly,
Ghislaine Landry, CGA
Manager
Individual, Business and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate
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