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 the prizes awarded in the XXXXXXXXXX are prescribed prizes within the meaning of section 7700 of the Income Tax Regulations.
Position: In light of the information provided, yes.
Reasons: The award satisfies the criteria of section 7700 of the Regulations.
XXXXXXXXXX
2012-043889
A. Mahendran
November 29, 2012
Dear XXXXXXXXXX:
Re: Prescribed Prize Prizes Awarded in the XXXXXXXXXX
We are writing in response to your correspondence received March 5, 2012, wherein you requested our views on whether the prizes awarded in the XXXXXXXXXX (the "Competition") are prescribed prizes within the meaning of section 7700 of the Income Tax Regulations (the "Regulations").
Based on the information provided, the Competition began on XXXXXXXXXX and was sponsored by XXXXXXXXXX. It was open to all legal residents of Canada who were over the age of majority in the province or territory in which they resided and at the time of entry, were enrolled as a full time or part time student in a post-secondary educational institution in Canada.
The contest was publicized throughout Canada via webcasts over the internet, social media, radio, newspaper, magazines, flyers, etc. The award presentation was webcasted from the XXXXXXXXXX.
The winning criteria was focused on presenting a new potentially viable sustainable business practice that could help the environment and help Canadian organizations to save money or generate additional revenues and were to be in compliance with Federal and provincial laws applicable in Canada.
The competition submissions were judged by the business leaders based on the following criteria: XXXXXXXXXX. The official competition rules, the details of the judging panel, the announcements of the semi-finalists and the winning teams of the first, second, third and the fourth prizes are available in the XXXXXXXXXX.
Section 7700 of the Regulations defines a prescribed prize for the purpose of subparagraph 56(1)(n)(i) of the Income Tax Act (the "Act") as any prize that is recognized by the general public and that is awarded for meritorious achievement in the arts, the sciences or service to the public, but does not include any amount that can reasonably be regarded as having been received as compensation for services rendered or to be rendered. On the basis of the information described above and our review of the information provided to us, it is our opinion that the prizes awarded in the Competition would qualify as prescribed prizes under section 7700 of the Regulations.
As indicated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency.
We trust that our comments will be of assistance to you.
Yours truly,
Sharmini Ratnasingham
for Director
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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