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.
Principal Issues: Whether (1) businesses should be allowed to deduct interest on loans for investments and (2) CRA is obligated to provide advanced rulings and interpretations in writing?
Position: (1) As stated in Interpretation Bulletin IT-533; (2) As stated in Information Circular IC 70-6R5
Reasons: (1) The law; (2) procedures when making such a request
Signed on August 31, 2006
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your correspondence addressed to XXXXXXXXXX, concerning some of the issues XXXXXXXXXX. I received a copy of your correspondence from XXXXXXXXXX on July 11, 2006.
The XXXXXXXXXX questioned whether businesses should be allowed to deduct interest on loans for investment. I am pleased to inform you that interest is generally deductible if it was paid on borrowed money used for the purpose of earning income from investments. The Canada Revenue Agency (CRA)'s view concerning the deductibility of interest on loans for investments is outlined in detail in Interpretation Bulletin IT-533, Interest Deductibility and Related Issues.
The XXXXXXXXXX indicated that the CRA should be obligated to provide advanced rulings and interpretations in writing. I am also pleased to inform you that it is CRA policy to consider all requests and to issue the resulting ruling or technical interpretation in writing, if possible. Information Circular 70-6R5, Advance Income Tax Rulings, outlines in detail the procedures that businesses should follow when making such a request.
I am attaching a copy of the publications mentioned above. They are also available on the CRA Web site at www.cra.gc.ca and can be obtained at any local tax services office or tax centre.
I trust that the above information is helpful.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Attachments
Suzanie Chua
(613) 957 2100
2006-019659
August 16, 2006
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2006
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2006
Email this Content