Income Tax Severed Letters - 2012-06-15

Ruling

2012 Ruling 2011-0430361R3 - Supplemental Ruling

Unedited CRA Tags
55(3)(a)

Principal Issues: Changes to ruling 2010-035799

Position: Ruling modified.

Reasons: Change in facts does not affect validity of rulings given.

Technical Interpretation - External

24 May 2012 External T.I. 2011-0423451E5 - Test Wind Turbines

Unedited CRA Tags
Section 1219 of the Income Tax Regulations

Principal Issues: Various questions regarding test wind turbines.

Position: See response

Reasons: Prior positions and wording of the Regulations

11 May 2012 External T.I. 2011-0428791E5 - Foreign Tax Credit

Unedited CRA Tags
ITA: ss 126(1); ss 126(2); ss 248(1); ss 9(1); ss 20(12); Article VII and XXIV of the Canada- United States Tax Convention (1980 )
Summary Under
Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Business-Income Tax
Summary Under
Tax Topics - Treaties - Income Tax Conventions - Article 24

Principal Issues: Whether an amount paid to the state of XXXXXXXXXX is eligible for either the foreign business or non-business tax credit under the Income Tax Act? If not, does Article XXIV of the Canada- United States Tax Convention (1980) (the “Treaty”) apply?

Position: The amount paid may be eligible for the foreign business tax credit under subsection 126(2) of the Income Tax Act.

Reasons: The amount paid may be considered an income or profits tax where a corporation is carrying on business in the foreign country.

Technical Interpretation - Internal

30 May 2012 Internal T.I. 2012-0434471I7 F - Remise de prix non monétaires aux employés

Unedited CRA Tags
5(1); 6(1)a)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)
distinction between non-cash award for overall contribution to workplace and performance recognition

Principales Questions: Si la valeur de certains prix et récompenses non monétaires qui sont accordés aux employés serait un avantage imposable.

Position Adoptée: Question de fait, en fonction de la politique administrative de l'Agence sur les cadeaux et récompenses, et dépendamment des circonstances pour chaque employé.

Raisons: C'est une question de faits de déterminer si 1) une récompense est valide dans le cadre de la politique administrative de l’Agence, et 2) si la valeur globale totale des cadeaux et des récompenses non monétaires reçues par un employé en question ne dépasse pas 500 $ par année

23 May 2012 Internal T.I. 2011-0418071I7 F - Remise de dettes, PAC

Unedited CRA Tags
80(1)"solde de pertes applicable" ; 80(3)a); 111(1)a); 111(8) "pertes autre qu'une perte en capital"
Summary Under
Tax Topics - Income Tax Act - Section 80 - Subsection 80(3) - Paragraph 80(3)(a)
debt settlement results in immediate application of forgiven amount to reduce NCL at that time
Summary Under
Tax Topics - Income Tax Act - Section 111 - Subsection 111(8) - Non-Capital Loss - D.2
debt settlement results in immediate application of forgiven amount to reduce NCL at that time

Principales Questions: Dans la situation où un contribuable demande, après le moment d’un règlement de dette, qu’une PAC subie dans une année d'imposition antérieure, soit déduite de son revenu imposable pour des années d'imposition précédant l’année où les PAC ont été subies, est-ce que le paragraphe 80(3) s'applique de sorte que le solde de la PAC est réduit avant l’application de cette PAC aux années antérieures?

Position Adoptée: Dans la présente situation, le paragraphe 80(3) s’applique en premier.

Raisons: Lors du règlement de dette, l’élément D.2 de la définition de la PAC vient réduire le montant de la PAC d’une année d'imposition du montant de la réduction qui découle de l’application de l'article 80. Cet événement a eu lieu avant le moment où le contribuable a demandé la déduction des PAC tel que le lui permet l'alinéa 111(1)a)

17 May 2012 Internal T.I. 2012-0437001I7 F - Price Adjustment Clause

Unedited CRA Tags
85(1)(e.2)
Summary Under
Tax Topics - General Concepts - Effective Date
per Gurberg, a PAC has retroactive effect
Summary Under
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(e.2)
no need to file amended s. 85(1) election where PAC engaged

Principales Questions: 1) Whether the CRA requires an amended election to be filed pursuant to subsection 85(7.1) and the payment of the penalty pursuant to subsection 85(8) as a condition for recognizing the validity of a price adjustment clause for the purposes of the application of paragraph 85(1)(e.2). 2) If the answer to question 1) is negative, whether it is based on the fact that the purpose of an election under section 85 is to elect on an agreed amount and the adjustment to the FMV of the share consideration does not modify the election.

Position Adoptée: 1) No; 2) General comments provided.

Raisons: 1) and 2) According to the law and previous positions.

14 May 2012 Internal T.I. 2010-0367831I7 F - Régime de pension étranger. France

Unedited CRA Tags
248(1); 5(1)
Summary Under
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1)
contributions paid by employer to voluntary French pension funds for expatriates were constructively received by employee member
Words and Phrases
constructive receipt
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Retirement Compensation Arrangement
since employer acted as employee agent in making pension contributions, no RCA, EBP or SDA

Principales Questions: Quel est le traitement fiscal des cotisations faites au CRE, CFE et IRCAFEX (des régimes de pensions français)?

Position Adoptée: Les cotisations sont du salaire pour l'employé qui doit ajouter les montants dans le calcul de son revenu selon le paragraphe 5(1).

Raisons: Lorsque l'employeur cotise au régime, il le fait au nom de l'employé et il agit à titre de mandataire. Les sommes ont implicitement été reçues par l’employé et il n'y a pas de cotisation de l'employeur

8 May 2012 Internal T.I. 2012-0445061I7 - Effective Interest Date

Unedited CRA Tags
79(7)(b)(ii) and (iii) Corporations Tax Act (Ontario) and 161(7)(b)(iv) Income Tax Act

Principal Issues: What is the effective interest date of a request to carry back additional non-capital losses found in an audit?

Position: In this case, the effective interest date is the date of the request to carry back the additional losses.

Reasons: If the taxpayer had originally requested to carry back sufficient losses to reduce the taxable income of the prior year to nil or, if the losses were not sufficient to do so, all of the losses in the loss year, the CRA would have treated the new request as part of the initial request with the same effective interest date. However, in this case, the losses had not been previously carried back as described above. Therefore, the request to carry back the additional losses is a new request and the effective interest date is 30 days after the date of the new request pursuant to subparagraph 161(7)(b)(iv).

1 May 2012 Internal T.I. 2011-0429421I7 - Successor Pool Reductions

Unedited CRA Tags
59(3.2)(c); 66.2(1); 66.2(5); 66.4(5); 66.7(3); 66.7(4)(a)(iii)

Principal Issues: Ordering of reductions to resource pools on disposition of a successor property

Position: Per legislation

Reasons: Confirm order of reduction to resource pools