2010 Ruling 2009-0347901R3 - Classification of a Dutch closed FGR

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 a Dutch closed FGR would be classified as a co-ownership arrangement rather than a corporation, a partnership or a trust?

Position: As a co-ownership arrangement.

Reasons: The FGR is being established such that each investor has an undivided co-ownership interest in the assets of the FGR.

XXXXXXXXXX 								2009-034790

XXXXXXXXXX , 2010

Dear XXXXXXXXXX :

Re: XXXXXXXXXX
Advance Income Tax Ruling

We are writing in reply to your letter of XXXXXXXXXX in which you requested an advance income tax ruling on behalf of the above-referenced taxpayers.

To the best of your knowledge and that of the taxpayers involved, none of the issues involved with this request:

(i) is involved in an earlier return of the taxpayers or a related person;

(ii) is being considered by a tax services office or a taxation centre in connection with a tax return already filed by the taxpayers or a related person;

(iii) is under objection; or

(iv) is before the courts or, if a judgement has been issued, the time limit for appeal has not expired.

The rulings given herein are based solely on the facts, proposed transactions and purposes of the proposed transactions described below. Facts and proposed transactions in the documents submitted with your request not described below do not form part of the facts and proposed transactions on which this ruling is based and any reference to these documents is provided solely for the convenience of the reader.

Unless otherwise stated, all references to a statute are references to the provisions of the Income Tax Act, R.S.C. 1985 c.1 (5th Supp.) as amended to the date hereof (the "Act"), and every reference herein to a Part, section, subsection, paragraph or subparagraph is a reference to the relevant provisions of the Act.

Definitions

In this letter the following terms have the meanings specified:

(a) "ABC" means XXXXXXXXXX

(b) "closed FGR" means a fiscally transparent investment fund established in the Netherlands the Participations of which are not transferable and may not be assigned but may be redeemed and re-issued upon subscription. In contrast, an open FGR is an FGR the Participations of which can be transferred or assigned without the consent of all holders of Participations;

(c) "Commitment" means the obligation of a Participant in accordance with the Participant's subscription form to pay certain amounts, as indicated by the Manager, in cash to the Depositary in accordance with the Terms and Conditions;

(d) "CRA" means Canada Revenue Agency;

(e) "Depositary" means XXXXXXXXXX ;

(f) "Dutch Authority" means the Dutch Authority for the Financial Markets (Stichting Autoriteit Financi?le Markten);

(g) "FMSA" means the Financial Markets Supervision Act of the Netherlands;

(h) "Information Memorandum" means the information memorandum in relation to the multi-client structure of the Manager as amended from time to time;

(i) "Manager" means XXXXXXXXXX

(j) "Net Asset Value" means the balance expressed in Euro of the intrinsic value of the Pool Assets and the Pool Obligations determined by, or on behalf of, the Manager from time to time in accordance with a valuation manual comprising the methods for valuation as described in the Information Memorandum;

(k) "Net Proceeds" means the total amount, net of all taxes and fees, management fee and other costs and expenses to be borne by the Pool, of distributions from entities in which the Pool invests, proceeds from divestments of such entities, and all other proceeds and receipts of the Pool, available for distribution to the Participants after payment of, or making reasonable reservation for, any obligations and operating expenses of the Pool;

(l) "Participant" of the Pool means a Dutch pension fund which will hold one or more Participations in the Pool;

(m) "Participation" in the Pool means a right of ownership evidenced by the inscription of the Participant's name in the Register of Participations, representing the holder's proportionate (i) co-ownership interest in the assets comprising the Pool and gross income from such assets and (ii) share of the liabilities attributable to such assets;

(n) "Pool" means XXXXXXXXXX ;

(o) "Pool Assets" means the assets of the Pool held by the Depositary (or by the Manager in the name of and on behalf of the Depositary) in its own name for the account and risk of the Participants in connection with the Pool;

(p) "Pool Obligations" means the obligations assumed and/or incurred by the Depositary (or the Manager in the name of and on behalf of the Depositary) in its own name for the account and risk of the Participants and any obligations assumed and/or incurred in accordance with the Terms and Conditions;

(q) "Proposed Transactions" means the transactions described in paragraphs 20 to 49 hereof which appear under the heading "Proposed Transactions";

(r) "qualified investors" has the meaning of that term described in section 1.1 of the FMSA;

(s) "Redemption Charge" means a charge payable to the Pool determined and confirmed by the Manager equal to the total amount of transaction costs and any other costs and fees involved with the redemption of Participations;

(t) "Regulations" means the Income Tax Regulations, C.R.C. 1977, c. 945, as amended. Again, all statutory references herein are to provisions of the Act unless otherwise specified. Further, the words and expressions that are defined for the purposes of the Act and Regulations shall have the same meanings for the purposes hereof;

(u) "Suspension Event" means an event determined by the Manager to qualify as a Suspension Event as detailed in section XXXXXXXXXX of the applicable Terms and Conditions of the Pool;

(v) "Tax Treaty" means the Canada-Netherlands Income Tax Convention; and

(w) "Terms and Conditions" means Terms and Conditions of Management and Custody which is an agreement to be entered into by the Manager, the Depositary and each Participant (separately) with respect to the Pool originating from the execution of the Participant's subscription form to participate in the Pool and forms part of the contractual relationship existing among them.

Our understanding of the facts, proposed transactions and purpose of the proposed transactions is as follows:

Facts

1. ABC is a foundation (a Stichting) that has its board seat and registered office in the Netherlands and acts as a pension fund for employers and employees in service of XXXXXXXXXX

2. The Manager is a limited liability company incorporated and organized as a public company ("naamloze vennootschap") under the laws of the Kingdom of the Netherlands. The Manager has its registered head office in the Netherlands (i.e., XXXXXXXXXX ).

3. The Depositary is a foundation (a Stichting) that has its board seat and its registered place of business in the Netherlands.

Description of the Pool

4. The Pool will qualify as a contractual investment fund ("beleggingsinstelling") within the meaning of the FMSA and will be constituted under the law of contract as a closed FGR. The Pool will be established as a Dutch Fund for Joint Account ("besloten Fonds voor Gemene Rekening" or closed FGR). The legal character of the Pool as described in the Terms and Conditions is as follows:

"XXXXXXXXXX "

5. Under Dutch laws the Pool will not have a separate legal personality, but instead will be characterized as an unincorporated contractual arrangement for the co-ownership of transferable and other financial assets as permitted by the FMSA. The Pool is fiscally transparent for Dutch tax purposes with respect to the character, timing, and source of income received by the Pool.

6. Participations in the Pool will only be offered to pension funds resident in the Netherlands and will never be held by any resident of Canada. They will be offered to "qualified investors" ("gekwalificeerde beleggers"), and therefore the Manager will not be subject to the supervision or oversight of the Dutch Authority in respect of the Pool. This is based on the notion that qualified investors possess the necessary experience and knowledge to make well-informed investment decisions.

7. A Participant in the Pool will have an obligation to pay its Commitment to the Depositary represented by the Manager, both acting on behalf of the Pool only.

8. The assets comprising the Pool will be held in custody by the Depositary, appointed by the Manager to carry out the usual duties of a custodian of a closed FGR.

9. The Depositary will be the owner of record of different securities, including shares of and loans receivable due from various Canadian entities, although beneficial ownership will at all times rest with the participants in the Pool. Participations in the Pool will not be transferable. Further, any income received by the Depositary will be legally held as agent, nominee, or otherwise on behalf of and for the benefit of the Participants.

10. The Depositary of the Pool will be the legal owner of multiple assets and will be subject to various liabilities. The net proceeds from the subscription by the Participants will be invested in a specific asset class constituting the Pool. As regards third parties, the Depositary of the Pool will be exclusively responsible for all liabilities attributable to it. All obligations, owed to creditors, that have been assumed and/or incurred by the Depositary (or the Manager in the name of and on behalf of the Depositary) in its own name for the account and risk of the Participants, will be assumed or incurred, as the case may be, on terms which will limit such creditors' recourse to assets to which the Depositary has legal title (i.e. assets of the Pool).

11. The Pool will be formed for a period of XXXXXXXXXX years from formation, subject to the provision that the Manager will have the ability to extend the life of the Pool for XXXXXXXXXX year periods to permit the orderly liquidation of Pool assets.

Rights of Participants

12. The Terms and Conditions will provide that each Participant in the Pool will be the beneficial owner of the assets owned by the Pool pro rata based upon the number of that person's Participations in the Pool. A Participant shall not bear obligations and losses in excess of the amount of the Participant's Commitment to the Pool.

13. The Terms and Conditions will also provide that no person can become a Participant if the admission or holding of Participation by that person or entity would adversely impact the tax transparency of the Pool for Dutch tax purposes.

14. The Terms and Conditions will also provide that Participations cannot be transferred or assigned other than to the Pool (i.e., by redemption). No voting rights will be attached to Participations save for the right set out in paragraph 24 below.

15. In respect of the redemption of a Participation by a Participant, the redemption method used by the Pool will be set out in the Terms and Conditions. Participations may be redeemed at the request of a Participant at their respective Net Asset Value less the Redemption Charge. Participations are redeemable on the first business day of each calendar year provided that no Suspension Event shall have occurred or continues to occur.

Management of the Pool

16. The Manager will be charged with overall responsibility for the management of the Pool in accordance with the Information Memorandum and the Terms and Conditions. In particular, the Manager will be entitled and authorized to:

(a) acquire and dispose of Pool Assets and to enter into and assume Pool Obligations in the name of the Depositary for the account and risk of Participants in the Pool;

(b) perform any and all other acts (i.e., governance either in its own name or in the name of the Depositary for the account and risk of Participants in the Pool).

17. In managing and administering the Pool, the Manager shall act solely in the best interests of the Participants. The management and administration of the Pool shall be performed for the account and risk of the Participants.

18. The Manager will be able to delegate its functions to third parties for the purpose of a more efficient conduct of its business. Similarly, the Depositary also will be entitled to delegate its functions to third parties.

19. The Manager may, at its sole discretion, and at any time, decide on behalf of the Depositary to make distributions to the Participants. Distributions will be made to the Participants pro rata based upon the respective number of their Participations.

Proposed Transactions

20. ABC proposes to be the lead Participant in the Pool which will enable institutional investors (i.e., other Dutch pension funds) to pool the assets of local pension schemes.

21. Participants in the Pool will invest pursuant to an Information Memorandum. By participating in the Pool as offered in the Information Memorandum, each Participant will fully approve and accept the Terms and Conditions.

22. Legal ownership of Pool assets will rest with the Depositary. Beneficial ownership of Pool assets will rest with the Participants.

23. Ownership of assets and liabilities will be maintained for the Pool and will be invested in accordance with the investment objectives applicable to the Pool. The Pool will operate independently from other pools or funds to be set up by the Manager, with each portfolio of assets being invested for the exclusive benefit of the Participants of the Pool. The net proceeds from the Participation by each Participant will be invested in a specific portfolio of assets for the account and risk of that Participant.

24. In accordance with the Terms and Conditions, any changes to the Terms and Conditions must have the prior approval of at least XXXXXXXXXX of the outstanding Participations, and cannot adversely affect any Participant.

25. Participations may be issued and redeemed by the Manager.

26. Participations will not be freely transferable. Rather, the Terms and Conditions will provide that a transfer of Participation is prohibited, other than transfers to the Pool on redemption of that Participation.

27. Participants can redeem their Participation in the Pool in the manner set out in the Terms and Conditions, as described above under "Rights of Participants".

28. All Participants will have the same rights as to dividends, repurchase of Participations, and proceeds in a liquidation. No general meetings of Participants shall be held and no voting rights shall be attached to Participations save for the right set out in paragraph 24 above.

29. Ownership of Participations shall entitle a Participant to participate and to share in the property of the Pool including - without limitation - income derived or generated from the investment of such property received by the Pool. Such income and gains will be treated as arising or accruing to each Participant in the Pool in proportion to the number of Participations owned by them.

30. The Terms and Conditions will provide that the Manager may "in its sole discretion and at any time, decide on behalf of the Depositary to distribute Net Proceeds ... to the Participants ... or to apply ... any Net Proceeds to comply with Pool Obligations". Generally, the Pool will intend to distribute its income to its Participants on an annual basis (unless otherwise provided) pro rata to each Participant in the Pool. The Manager will decide whether a distribution will be made and in what amount.

31. The Board of Directors of the Manager may decide to pay out interim distributions for the Pool in accordance with the applicable laws.

Management of the Fund

32. The management and central administration of the Pool will rest with the Manager.

33. The Manager will have overall responsibility for management of the assets comprising the Pool in accordance with the Terms and Conditions and any other relevant regulatory requirements.

34. In managing and administering the Pool, the Manager shall act solely in the interest of the Participants. Further, the management and administration of the Pool shall be performed solely for the account and risk of the Participants. However, the Manager may employ third parties in the exercise of its powers and duties under these Terms and Conditions.

Depositary

35. The Manager proposes to appoint the Depositary as the depositary for the Pool. The Depositary shall be entrusted with the management and custody of the assets comprising the Pool, shall carry out all operations concerning the day-to-day administration of the assets comprising the Pool, shall perform its duties pursuant to the Terms and Conditions and shall execute transactions at the direction of the Manager pursuant to the Terms and Conditions. The Depositary will have no other material duties in connection with the Pool.

36. All Pool Assets shall be legally held by, and administered in the name of, the Depositary.

37. The Depositary may, for safe and efficient handling of the Pool Assets, from time to time appoint a sub-depositary ("Sub-depositary") as an agent of the Depositary in each jurisdiction to execute and perform such powers and obligations of the Depositary under the Terms and Conditions as the Depositary may from time to time determine. The Sub-depositary will have custody of the Pool's securities and cash deposits in each of those jurisdictions. The 'Sub-depositaries' will be selected in accordance with market practice and will be arm's length parties.

38. The Depositary or the Sub-depositary will withhold and remit amounts on behalf of Participants in respect of their Part XIII tax liabilities under the Act. Specifically, the Depositary or the Sub-depositary will determine the amount of Part XIII tax to withhold on amounts paid or credited by a payer resident in Canada on a particular day in the following manner:

(a) The Depositary or the Sub-depositary will first determine, for the Pool, the percentage of Participation held by each Participant. The Depositary or the Sub-depositary will then apply those respective percentages to the aggregate amount of the Pool's Canadian source receipts that are taxable under Part XIII of the Act to determine the amount received by any or all of the Participants. To the extent the receipts are allocated to Canadian residents, there will be no Part XIII tax withheld. The Depositary or the Sub-depositary will apply any relevant Tax Treaty provisions, as the case may be, to determine the amount of tax to withhold in respect of the amounts received by the Participants that are resident in the Netherlands for the purposes of the Tax Treaty.

(b) At the end of each month, the Depositary or the Sub-depositary will compute the total amount to withhold on behalf of the Participants that are not resident in Canada for that month as determined above and remit that amount to the CRA by the XXXXXXXXXX day of the following month. Within XXXXXXXXXX months after the end of each year, the Depositary or the Sub-depositary will produce the NR4 Supplementary forms for the Participants, reporting the total amount of Part XIII tax withheld and remitted to the CRA on behalf of the Participants and will forward to the CRA a copy of the NR4 Supplementary forms issued by the Pool as well as an NR4 Summary for the year.

(c) The Depositary or the Sub-depository will also determine, for the Pool, the amount of any "assessable distribution" from a "Canadian property mutual fund investment" (as those terms are defined in subsection 218.3(1) of the Act) for purposes of any Part XIII.2 tax that may be applicable. The Depositary or the Sub-depositary will withhold and remit such amounts as and when required, including reporting the total amount of Part XIII.2 tax withheld and remitted to the CRA in prescribed form.

39. The delegation by the Depositary of certain of its duties to sub-depositaries shall not affect, reduce or increase the Depositary's duty of supervision in accordance with the FMSA.

Details of Investment

40. The Pool's assets shall be invested in compliance with the principle of risk-spreading within the investment policy guidelines specified for the Pool, and in accordance with the investment options and restrictions of the Terms and Conditions.

41. The general investment objective of the Pool is to manage the assets beneficially owned jointly by Participants exclusively for the benefit of the Participants and to make investments available to investors having certain investment objectives and policies. The Pool's primary investment objective is to realize capital growth and/or to generate income for the benefit of Participants. The Pool will seek to achieve this objective, in accordance with the policies and guidelines established by the Board of Directors of the Manager.

42. The Pool may hold cash on an ancillary basis.

43. The Pool will continue to invest only in those investments permitted by the Terms and Conditions, the Information Memorandum, the FMSA and any other regulatory requirements. Participation in the Pool will only be offered to qualified investors by way of an Information Memorandum, and that there are currently no additional regulatory requirements with which the Pool will be required to comply.

44. The Pool may also invest in transferable securities and money market instruments for investment purposes or for cash flow management purposes.

Pass-Through Treatment of the Pool

45. The Pool will be treated as fiscally transparent for Dutch tax and legal purposes with respect to the character, timing, and source of income received by the Pool. In particular, the Pool itself will not be subject to tax, but rather its Participants will be subject to tax. For example, when the Depositary receives a dividend from a Canadian investee, for Dutch tax purposes that dividend will be attributed to the Participants in the Pool pro rata to their investment in the Pool. The Netherlands tax authorities have confirmed the transparency of the Pool for Dutch tax purposes. The Netherlands have also reached agreement with the United Kingdom and with the United States on the tax transparency of Netherlands FGR. Furthermore, the Netherlands Tax Authority will not treat the Pool as a resident of the Netherlands for purposes of its income tax treaty with Canada.

46. Distributions, interest or gains arising on the disposition of securities may be subject to tax, including withholding tax in the countries where the Pool assets are invested.

47. The Pool will be constituted by the Manager with the aim that it would be viewed as tax transparent in the applicable investment markets in order to achieve tax neutrality from the perspective of the Participants in the Pool. As such, where double taxation treaties apply, those treaties between the countries where the Participants are resident and the countries where the investments are located will be relevant. The objective of the Manager is that the Pool may effectively be ignored for tax treaty purposes. In accordance with the Terms and Conditions, the Manager may also delegate its functions to conduct its business more efficiently in each jurisdiction in which the Pool invests.

48. The tax treatment of income at an investor level is dependent on the tax rules and regulations applicable to the particular investor.

49. Participants will not be subject to tax in the Netherlands on the basis that they will all qualify as tax exempt pension funds.

Purpose of the Proposed Transactions

50. The Manager's goal is to be the premier dedicated asset manager for institutions subject to occupational retirement provisions. In particular, the Manager proposes to establish a tax transparent cross-border pension asset pooling structure to enable institutional investors to pool the assets of their local pension schemes into a Dutch investment pool. The purpose of the Proposed Transactions is to enable these institutional investors to pool together the investment assets of different Dutch pension plans and leverage the knowledge and experience of the Manager as an asset manager. The pooled assets would be collectively held and future investments would be made through the Pool to create better returns for the pension plan Participants.

51. After significant research and input from interested parties, including some of the Manager's largest funds, the Dutch Fund for Joint Account (closed FGR) was selected as the desired pooling vehicle for pension plan assets because it is a vehicle designed to provide complete tax transparency for multi-national corporations seeking to offer their individual, underlying Dutch pension plans an opportunity to access an array of pooled investment options. The use of the closed FGR as the dedicated vehicle to pool pension assets in a tax transparent fashion has the support of the Netherlands Ministry of Finance (MOF). In particular, the Netherlands MOF has expressed its willingness to explain the concept of the closed FGR and its tax transparency and the consequences thereof to its tax treaty partners. This support is based on the stated intent of positioning the Netherlands as a suitable jurisdiction for the management of pension assets, as an alternative to Ireland (CCF), Austria (AIF), and Luxembourg (FCP).

52. The proposed pooling of pension plan assets will provide the opportunity to lower overall risks, leverage the strengths of the Manager and its Netherlands-based pension funds, and enable a number of cost savings to be achieved through economies of scale. These savings should include a reduction in management fees, administration costs, and custodian fees. Equally important, a pooled arrangement should allow smaller Dutch pension funds to diversify their risk by using a larger number of investment managers than would be possible if they operated on a stand-alone basis. In short, the Pool is expected to reduce costs, reduce risks and increase the net return potential of Dutch pension plans while at the same time improving the governance and efficiency of these pension plans.

53. A number of arm's length Dutch pension plans are considering making an investment in the different Pools. These potential investors will investigate whether the pooling structure offered is suitable for their particular organization and will ultimately decide whether they will invest in the Pool.

Rulings Given

Provided that the preceding statements constitute a complete and accurate disclosure of all of the relevant facts, proposed transactions and purpose of the proposed transactions, and provided that the proposed transactions are completed in the manner described above, our rulings are as follows:

A. For the purposes of the Act, a Participant will be treated as owning a direct proportionate and undivided interest in each property comprising the Pool.

B. For the purposes of Part I of the Act, a Participant will be treated as directly earning or realizing its proportionate share of income, losses, capital gains and capital losses from the property comprising the Pool whether or not distributed.

C. For the purposes of Part I of the Act, the character, source and timing of income, losses, capital gains, and capital losses earned by a Participant from the assets comprising the Pool in which a Participant has invested will not be affected by the fact that the Pool has been used as a mechanism by which a Participant owns its proportionate share of those assets.

D. A distribution from the Pool to a Participant, if any, as described in paragraphs 30 and 31 above, will not be a taxable event for purposes of Part I of the Act.

E. Provided that a Participant is not considered to be carrying on business in Canada with respect to its ownership of the Participation of the Pool, for the purposes of Part XIII and Part XIII.2 of the Act, any amount paid or credited by a payer resident in Canada to the Depositary in respect of assets of the Pool will be treated as being an amount paid or credited to the Participant in proportion to its ownership of the assets of the Pool.

F. Provided that a Participant is not considered to be carrying on business in Canada with respect to its ownership of the Participation of the Pool, for the purposes of applying Part XIII and Part XIII.2 of the Act, the character, source and timing of any amount paid or credited by a payer resident in Canada in respect of the Participant's interest in the assets comprising the Pool will not be affected by the fact that the Pool has been used as a mechanism by which the Participant owns its proportionate share of those assets.

G. If a Participant redeems its Participation in the Pool as described in paragraph 15 above, the Participant will, for the purposes of the Act, have disposed of a proportionate interest in the assets comprising the Pool for the purposes of calculating any capital gain or loss on such disposition.

H. Provided that a Participant is not considered to be carrying on business in Canada with respect to its ownership of the Participation of the Pool, for purposes of applying Parts XIII and XIII.2 of the Act, a Participant that is resident of the Netherlands for purposes of the Tax Treaty, shall be entitled to the benefits of the Tax Treaty in respect of its proportionate interest in the assets of the Pool, as applicable, to the extent such income qualifies for relief under the provisions of the Tax Treaty.

I. Provided that a Participant is not considered to be carrying on business in Canada with respect to its ownership of the Participation of the Pool, if the Depositary or a Sub-depositary calculates and remits Part XIII or XIII.2 tax on behalf of the Participant in the manner set out in paragraph 38 above, the amounts paid by the Depositary or Sub-depositary in respect of the Participant's Part XIII or XIII.2 tax will be treated as being paid on behalf of the Participant in respect of its Part XIII or XIII.2 tax liability and both the Participant and the Depositary or the Sub-depositary will be considered to have complied with Parts XIII and XIII.2 of the Act in respect of income earned through the Pool by the Participant.

J. The Pool will not be considered to be a trust for purposes of the Act.

The above rulings are given subject to the general limitations and qualifications set out in Information Circular 70-6R5 dated May 17, 2002, and are binding on the CRA provided that the proposed transactions are completed by XXXXXXXXXX .

These rulings are based on the Act in the present form and do not take into account amendments to the Act which, if enacted into law, could have an effect on the rulings provided herein.

Opinion

Provided that the proposed subsection 94(3) is enacted in substantially the same manner as that described in former Bill C-33 that was reintroduced as Bill C-10 in the House of Commons on October 29, 2007 in the 2nd session of the 39th Parliament, it is our opinion that proposed subsection 94(3) will not apply to the Pool. The 39th Parliament of Canada was dissolved on September 7, 2008 and as a result federal bills outstanding as of September 7, 2008 cannot become law unless they are reintroduced in the 40th Parliament. Bill C-10 has not yet been reintroduced in the 40th Parliament. Instead, the Federal Budget of January 27, 2009 stated that the Government will consider the recommendations of the Advisory Panel on Canada's System of International Taxation which were released in December 2008 before proceeding with the proposed sections 94 and 94.1 to 94.4.

Other Comments

Nothing in this ruling should be construed as implying that the CRA has agreed to or ruled on whether any Participant is a resident of the Netherlands for the purposes of the Tax Treaty, whether income referred to herein is taxable under Part I, Part XIII or Part XIII.2, or the manner in which any article of the Tax Treaty applies to any Participant. In addition, nothing in this letter should be construed as implying that the CRA has agreed to or reviewed any tax consequences relating to the facts and proposed transactions described herein other than those specifically described in the rulings given above. In particular, the CRA has not examined and therefore takes no position on whether any

Participant would be considered to be carrying on business in Canada because of the provision of services to it by the Depositary or Sub-depositary in reference to its investments in Canadian securities.

Yours truly,

XXXXXXXXXX
Section Manager
for Division Director
International and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch