Income Tax Severed Letters - 2014-03-05

Ministerial Correspondence

5 February 2014 Ministerial Correspondence 2013-0514531M4 - Indian Tax Exemption

CRA Tags
81(1)(a)
Summary Under
Tax Topics - Other Legislation/Constitution - Federal - Indian Act - Section 87
effective date of expanded exemption

Principal Issues: Whether an Indian registered under Bill C-3 may be exempt for any period prior to January 31, 2011, the effective date at which that Bill became law?

Position: No.

Reasons: An Indian registered under the Gender Equity in Indian Registration Act (previously Bill C-3), may only benefit from the exemption as of the effective date of that Act, that is, January 31, 2011, - the earliest date at which they are entitled to be registered - and not before that date.

Technical Interpretation - External

20 February 2014 External T.I. 2012-0460191E5 - Permanent establishment in a province

CRA Tags
ITR 400(2)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 400 - Subsection 400(2)
general factors

Principal Issues: Whether a corporation has a permanent establishment in a province?

Position: Question of fact. General comments provided.

Reasons: We can only provide a determination of whether a PE exists in the context of an audit. We provided general comments to assist the taxpayer's representative in making that determination.

11 December 2013 External T.I. 2013-0474161E5 - T-slips and dividend and interest

CRA Tags
12, 89, 8(2)
Summary Under
Tax Topics - General Concepts - Payment & Receipt
constructive receipt
Summary Under
Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a)
constructive receipt

Principal Issues: What is the meaning of the terms "paid" and "received" in the context of a corporation that is paying dividends and/or interest to its shareholders?

Position: "Paid" is not defined in the Act, therefore, the plain and ordinary meaning of each should be used. Generally, they would be the same date. "Received" is defined in the Act for the purposes of items mailed. Jurisprudence has also considered the meaning of this word.

Reasons: Jurisprudence states that ordinary meaning should be used in relation to "paid". "Received" is defined in the Act for the purposes of things mailed. Otherwise, recent case law has considered this term.

4 December 2013 External T.I. 2012-0465891E5 F - Primes d'assurance / Premiums

CRA Tags
6(1)(f), 15(1), 6(1)(a)
Summary Under
Tax Topics - Income Tax Act - Section 15 - Subsection 15(1)
insurance premium benefits qua shareholder
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) - Subparagraph 6(1)(a)(i)
sub plan with only one employee of particular employer could be a group plan if benefits similar to those for employees in other sub plans

Principales Questions: 1. Est-ce que le paiement des primes d'assurance payées par une société constitue un avantage conféré à un actionnaire en vertu du paragraphe 15(1)?
2. Dans la négative, le contribuable désire savoir si le régime pourrait constituer un « régime collectif ». / 1. Whether there is a benefit conferred on a shareholder under subsection 15(1) when a corporation pays the shareholder's insurance premiums? 2. If not, the taxpayer would like to know whether the plan could be considered a "group plan".

Position Adoptée: 1. C'est habituellement un avantage à 15(1) mais peut aussi être un avantage à 6(1)a). 2. Le régime d'assurance pourrait être considéré comme un régime d'assurance collective s'il y a plus de deux adhérents et ce, même si les adhérents ne sont pas à l'emploi du même employeur. / 1. This is usually a benefit under subsection 15(1), but may also be a benefit under paragraph 6(1)a). 2. The plan could be considered as a group insurance plan if there are more than two participants in the plan, even if the participants are not employees by the same employer.

Raisons: 1. Question de fait / Question of fact. 2. Position antérieure de l'ARC. / This is consistent with our previous position.

Technical Interpretation - Internal

30 January 2014 Internal T.I. 2012-0460181I7 - Application of paragraph 225.1(6)(b)

CRA Tags
216, 116(2), 116(1), 225.1(6), 225.1(1), 215(1), 212(1)
Summary Under
Tax Topics - Income Tax Act - Section 225.1 - Subsection 225.1(6) - Paragraph 225.1(6)(b)
collection limitations apply to NR recipient

Principal Issues: Whether the Minister can rely on paragraph 225.1(6)(b) in order to commence collection actions against a non-resident where rental income is received by a non-resident from Canadian sources to which withholding is required by subsection 215(1), but for which no amount of tax was withheld or remitted?

Position: No, but the Minister may commence collection actions without delay against the payor.

Reasons: Paragraph 225.1(6)(b) provides that the collection restrictions in subsection 225.1(1) do not apply in situations where an amount is required to be deducted or withheld and remitted or paid under the Act or Regulations. Since subsection 215(1) requires a person who pays, credits or provides an amount on which a tax is payable under Part XIII to deduct or withhold from it the amount of tax and remit it to the Receiver General, paragraph 225.1(6)(b) of the Act would be applicable.
In the case of a non-resident recipient, the amounts are not amounts that the non-resident was required to withhold and deduct. Therefore, the exemption from the collection restrictions in paragraph 225.1(6)(b) does not apply. On the other hand, paragraph 225.1(6)(b) would apply to an assessment against the person who paid the rent to the non-resident owner of the property. Therefore, collection actions could not be commenced immediately against the non-resident owner of the Canadian property, but could be commenced against the Canadian renter or agent.

27 January 2014 Internal T.I. 2012-0472161I7 - Gifts by Will

CRA Tags
118.1(5), 104(6)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 107 - Subsection 107(2)
gifts v. distributions made to charities
Summary Under
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts
gifts. v. distributions made to charities
Summary Under
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(5)
gifts. v. distributions made to charities

Principal Issues: 1. Whether the trustees are empowered under the second will to give a charitable gift. 2. Interplay between 118.1 and 104(6)

Position: 1. No. 2. See memo.

Reasons: 1. Reading of the second will. 2. See memo.

23 December 2013 Internal T.I. 2013-0498811I7 - Confidentiality of Non-resident Account Number

CRA Tags
241
Summary Under
Tax Topics - Income Tax Act - Section 241 - Subsection 241(1)
authorization required even where taxpayer provided underlying information

Principal Issues: Whether the CRA may provide the Non-resident Account Number to a third party caller at the time of the call in situations where the caller has provided the information to open a new Non-resident Account over the phone on behalf of a taxpayer, but the third party had not yet provided authorization from the taxpayer to receive taxpayer information?

Position: No.

Reasons: The Minister may only provide taxpayer information in those circumstances provided for by the Income Tax Act. According to paragraph 241(5)(b) of the Act, the Minister may only provide taxpayer information to a third party if the taxpayer gives consent to the disclosure.

18 November 2013 Internal T.I. 2013-0474281I7 - Education Assistance Payments

CRA Tags
146.1, 118.5

Principal Issues: Whether the student's enrolment in XXXXXXXXXX qualifies for an Educational Assistant Payment under the Act.

Position: Yes

Reasons: A qualifying educational program includes students attending a post-secondary school level program of courses at an institution described in subparagraph (a)(ii) of the definition "designated educational institution" in subsection 118.6(1), of a technical or vocational nature designed to furnish a person with skills for, or improve a person's skills in, an occupation.