Income Tax Severed Letters - 2009-08-14

Ruling

2009 Ruling 2008-0284551R3 - Royalty Paid to Non-Resident

Unedited CRA Tags
212(1)(d); 245; Article XII & XXIX-A of Canada-U.S. Tax Convention

Principal Issues: Whether a royalty paid by a Canadian corporation to a U.S. corporation is exempt from Part XIII tax as a result of Article XII of the Canada-U.S. Tax Convention?

Position: Yes, if the U.S. corporation is the beneficial owner of the royalty, and the payment is not part of an avoidance transaction.

Reasons: The U.S. corporation is entitled to benefits of the Convention under Article XXIX-A(3).

2009 Ruling 2008-0300741R3 - Amalgamation of paragraph 149(1)(l) corporations

Unedited CRA Tags
149(1)(l)

Principal Issues: 1. What are the tax consequences to the corporations if three paragraph 149(1)(l) corporations amalgamate? 2. What are the tax consequences to the shareholders of these corporations?

Position: 1.The corporations will not incur dispositions of property. 2. (a) There will be no disposition for members exchanging their memberships of the society for shares in the society continued as a corporation. (b) The members will have a disposition of their shares of the predecessor corporations when the shares are exchanged for shares of the amalgamated corporation.

Reasons: 1.This transaction is completed under XXXXXXXXXX corporate law. Under this legislation the amalgamated corporation is a continuance of the three predecessor corporations. 2. (a) There are no proceeds of disposition or capital property being transferred to the shareholders. (b) Subparagraph 248(1)(b)(iii) of the definition of "disposition" applies.

XXXXXXXXXX 2008-030074

XXXXXXXXXX , 2009

2009 Ruling 2009-0321881R3 F - Montant forfaitaire - Prestation de retraite

Unedited CRA Tags
56(1)a)(i)

Principales Questions: Les montants forfaitaires sont-ils imposables conformément au sous-alinéa 56(1)a)(i)?

Position Adoptée: Oui, les montants sont imposables en vertu du sous-alinéa 56(1)a)(i).

Raisons: Selon les faits, les montants forfaitaires constituent des paiements au titre d'une prestation de retraite ou de pension

Ministerial Correspondence

30 July 2009 Ministerial Correspondence 2009-0334501M4 F - Entreprise de prestation de services personnels

Unedited CRA Tags
125(7) 18(1)p)

Principales Questions: Quels sont les éléments qui ont permis à l'ARC de conclure que la Société du contribuable exploitait une entreprise de prestation de services personnels?

Position Adoptée: Voir la lettre ci-dessous.

Raisons: Abstraction faite de la Société, le contribuable serait un employé de la Société à qui il fournit des services.

21 July 2009 Ministerial Correspondence 2009-0310511M4 F - Crédit d'impôt pour la rénovation domiciliaire

Unedited CRA Tags
2009 Federal Budget - Annex 5

Principal Issues:
Les dépenses reliées aux coûts d'achat et d'installation d'un système domotique résidentiel se qualifient-elles de dépenses admissibles donnant droit au CIRD?

Position:
Question de fait

Reasons:
Commentaires généraux fournis conformément au budget fédéral déposé le 27 janvier 2009.

21 July 2009 Ministerial Correspondence 2009-0312581M4 F - Crédit d'impôt pour la rénovation domiciliaire

Unedited CRA Tags
2009 Federal Budget - Annex 5

Principal Issues: Quelles sont les dépenses admissibles donnant droit au CIRD?

Reasons:
Commentaires généraux fournis

21 July 2009 Ministerial Correspondence 2009-0312601M4 F - Crédit d'impôt pour la rénovation domiciliaire

Unedited CRA Tags
2009 Federal Budget - Annex 5

Principal Issues:
Quelles sont les dépenses reliées à la rénovation d'un condominium qui donneront droit au CIRD?

Position:
Question de fait

Reasons:
Relativement à un immeuble en copropriété, le crédit pourra être demandé à l'égard des dépenses admissibles engagées pour rénover l'unité qui est admissible à titre de résidence principale du particulier ainsi qu'à l'égard de la portion des dépenses engagées pour rénover les parties communes attribuables au particulier.

21 July 2009 Ministerial Correspondence 2009-0316951M4 F - Crédit d'impôt pour la rénovation domiciliaire

Unedited CRA Tags
2009 Federal Budget - Annex 5

Principales Questions:
Les dépenses reliées aux coûts d'achat et d'installation d'une fosse septique se qualifient-elles de dépenses admissibles donnant droit au CIRD?

Position Adoptée:
Question de fait

Raisons:
En règle générale, le remplacement d'une fosse septique sur le fonds de terre qui fait partie d'une habitation admissible sera considéré comme une rénovation ou une modification à caractère durable faisant partie intégrante d'une habitation. Les dépenses encourues à cette fin donneront donc droit au CIRD.

Technical Interpretation - External

5 August 2009 External T.I. 2009-0308461E5 - Moving Expenses - Meaning of "new work location"

Unedited CRA Tags
62(1); 248(1)

Principal Issues:
1. What is the meaning of the term "new work location" for purposes of the moving expense deduction?
2. Can eligible moving expenses be deducted against the income of more than one employment at a "new work location" for purposes of subparagraph 62(1)(c)(i) of the Act?

Position:
1. Question of fact - depends on the context in which it is being applied.
2. Question of fact, but possibly yes.

Reasons:
1. Where a measure is required, the term must be restrictive, for example, in the case of a taxpayer moving from one neighbourhood to another. In this case, "new work location" would refer to the specific place of employment. In other circumstances, it may have a wide connotation, such as where a taxpayer relocates from one city to another. In this case, the "new work location" may refer to the city, in general.
2. Where a measure is not required, a taxpayer who relocates from one city to another may be entitled to deduct his or her eligible relocation expenses against employment income earned from more than one place of employment in the city (i.e., the "new work location").

2009 - 030846
XXXXXXXXXX Renee Sigouin
(613) 957-2128
August 5, 2009

24 July 2009 External T.I. 2009-0332711E5 - Taxation of Income of an Indian from Guiding

Unedited CRA Tags
Paragraph 81(1)(a)

Principal Issues: Whether income from guiding on "traditional hunting grounds" would be exempt from tax as per paragraph 81(1)(a) of the Income Tax Act.

Position: Maybe.

Reasons: It is a question of fact whether the income earned is business income or employment income and whether or not the income is situated on a reserve. It would depend whether the "traditional hunting grounds" were located on a reserve. This can only be determined through consultation with the relevant Tax Services Office.

23 July 2009 External T.I. 2007-0260961E5 - Universities Outside Canada

Unedited CRA Tags
Section 118.5 Schedule VIII

Principal Issues: Whether XXXXXXXXXX is considered by the CRA to be a "university outside Canada" for purposes of section 118.5 of the Income Tax Act?

Position: Yes

Reasons: Confirmed by IRPPD. XXXXXXXXXX is a member of XXXXXXXXXX , and confers degrees at the Bachelor level and above.

2007-026096
XXXXXXXXXX Lori Merrigan
(613) 957-8979
July 23, 2009

Conference

5 August 2009 Roundtable, 2009-0319411C6 - Articles IV(6) and XXI(4) of the Canada-US Treaty

Unedited CRA Tags
Articles IV(6) and XXI(4) of the Canada-US Treaty

Principal Issues: Is the determination of whether persons are related for purposes of paragraph 4 of Article XXI of the Treaty determined at the LLC or US Tax Exempt level?

Position: The determination of whether persons are related for purposes of paragraph 4 of Article XXI of the Treaty is determined at the US Tax Exempt level.

Reasons: See below.

5 August 2009 Roundtable, 2009-0319431C6 - Article XXIX A of the Canada-US Treaty

Unedited CRA Tags
Article XXIX A of the Canada-US Income Tax Treaty

Principal Issues: Status of pending written guidance regarding the interpretation of the protocol including guidance in regard to reliance on the Treaty?

Position: See below.

Reasons: See below.

5 August 2009 IFA Roundtable Q. 4, 2009-0319441C6 - Article V(9)(b) of the Canada-US Treaty

Unedited CRA Tags
Article V(9)(b) of the Canada-US Treaty
services PE for services rendered between related parties

Principal Issues: Is there a discrepancy between the CRA's position that subparagraph 9(b) of Article V of the Treaty could apply where services are rendered between related parties and the US Joint Committee on Taxation's statement in their report entitled "Explanation of the proposed Protocol to the Income Tax Treaty Between the United States and Canada" (JCX-57-08) dated July 8, 2009

Position: No.

Reasons: See below.

Technical Interpretation - Internal

21 July 2009 Internal T.I. 2009-0322591I7 F - Déduction des intérêts

Unedited CRA Tags
20(1)c); 20(1)d) ; 212(1)b)

Principales Questions: L'émission d'un billet pour reconnaître un emprunt constaté par un billet et les intérêts capitalisés sur l'emprunt constitue-il un paiement ou une novation?

Position Adoptée: non

Raisons: Il n'y a pas de paiement de la dette initiale et le créancier a toujours des recours en vertu du premier billet.