Income Tax Severed Letters - 2017-10-18

Technical Interpretation - External

20 September 2017 External T.I. 2017-0719471E5 - Whether advertising on social media is deductible

Unedited CRA Tags
19.1, 18(1)(a), 18(1)(b), 18(1)(h), 67

Principal Issues: Whether amounts that are incurred to advertise on Social Media are deductible business expenses.

Position: Yes provided the conditions in paragraphs 18(1)(a), (b) and (h) are met and the amount is reasonable in the circumstance.

Reasons: See letter.

8 September 2017 External T.I. 2014-0558601E5 - Amount of foreign withholding tax paid by partner

Unedited CRA Tags
126
Summary Under
Tax Topics - Income Tax Act - Section 126 - Subsection 126(1)
requirements for a partner to claim, for FTC purposes, a disproportionate share of withholding tax borne by the partnership

Principal Issues: For the purpose of the foreign tax credit, can the foreign withholding tax considered to be paid by a member of a partnership be something other than a pro-rata amount of the total foreign withholding tax paid by the partnership?

Position: Yes, in certain circumstances. When the amount of foreign withholding tax paid by (i.e., withheld from the payment to) the partnership was computed by reference to each partner’s treaty status with the jurisdiction from which the partnership earned the foreign source income; and the evidence provided demonstrates that the sum of the amounts of foreign withholding tax considered to be paid by each partner does not exceed the amount of foreign tax actually paid by the partnership.

Reasons: The Act permits a foreign tax credit in certain circumstances for an amount of foreign tax paid by a taxpayer. In certain limited situations, the amount paid need not necessarily represent a pro-rata amount.

9 August 2017 External T.I. 2017-0709351E5 - Interaction between subsections 98(1) and 116(5)

Unedited CRA Tags
116(5), 98(1)
Summary Under
Tax Topics - Income Tax Act - Section 98 - Subsection 98(1) - Paragraph 98(1)(c)
a negative ACB gain from a partnership interest that is TCP is not subject to s. 116
Summary Under
Tax Topics - Income Tax Act - Section 116 - Subsection 116(5)
gain from negative partnership interest ACB not subject to s. 116(5)

Principal Issues: Whether subsection 116(5) of the Income Tax Act applies to a non-resident partner who is deemed to have realized a gain from a disposition of the partnership interest pursuant to subsection 98(1) on the dissolution of the partnership.

Position: No.

Reasons: Subsection 98(1) does not deem the partnership interest to be disposed to a purchaser.

Technical Interpretation - Internal

9 June 2017 Internal T.I. 2017-0690251I7 - Exemption amounts for volunteer emergency services

Unedited CRA Tags
81(4)

Principal Issues: Whether the exemption of up to $1,000 for amounts received for volunteer emergency services is available on a per-employer basis?

Position: Yes.

Reasons: Consistent with wording and technical notes.

5 June 2017 Internal T.I. 2014-0561391I7 F - Deemed security pursuant to 220(4.51)

Unedited CRA Tags
220(4.5); 220(4.51)
Summary Under
Tax Topics - Income Tax Act - Section 220 - Subsection 220(4.51)
s. 220(4.51) exemption from providing security for deferred emigration tax on up to $100,000 of capital gains is available for larger gains

Principales Questions: Whether deemed security is considered to have been provided pursuant to subsection 220(4.51) in a situation where the total amount of tax for which security for departure tax must be provided pursuant to subsection 220(4.5) exceeds the amount of the deemed security?

Position Adoptée: Yes. An individual is entitled to an amount of deemed security under subsection 220(4.51) even if the total amount of security to be furnished under subsection 220(4.5) exceeds that amount.

Raisons: Wording of the Act.

6 August 2014 Internal T.I. 2013-0500321I7 - School Boards - 149(1)(c)

Unedited CRA Tags
149(1)(c)

Principal Issues: Are school boards public bodies performing a function of government

Position: Yes

Reasons: School boards are governed by elected school board trustees. They have been delegated authority by the provincial/territorial governments to provide educational services in a school district. They are accountable to the citizens that elected them and to the provincial/territorial governments.