Income Tax Severed Letters - 2018-05-02

Ruling

2016 Ruling 2016-0626681R3 - Cross-border Butterfly

Unedited CRA Tags
55(2), 55(3)(b), 55(3.1), 55(3.2)(h), 86.1, 212.1,15(2.11)

Principal Issues: Whether the Canadian “spin-off butterfly” transactions, in the context of a cross-border butterfly, as described below, meet legislative and administrative requirements.

Position: Transactions meet requirements.

Reasons: Consistent with law and administrative requirements.

2016 Ruling 2016-0664041R3 - Participating debt interest - contingent payment

Unedited CRA Tags
212(1)(b)(ii); 212(3)
Summary Under
Tax Topics - Income Tax Act - Section 212 - Subsection 212(3) - Participating debt interest
interest that can increase with commodity price is not participating debt interest until this occurs

Principal Issues: Whether an additional payment that is contingent on the price of a commodity would taint the periodic interest payment on an obligation if an additional payment is never paid or becomes payable on that obligation, i.e., would the periodic interest be considered "participating debt interest."

Position: No.

Reasons: The definition of a "participating debt interest" refers to interest "that is paid or payable on an obligation, all or any portion of which …". Since a contingent amount would not be considered "payable," until an additional payment is paid or becomes payable, the periodic interest would not be considered participating debt interest. However, once an additional payment is paid or becomes payable, the periodic interest on such obligation would be considered participating debt interest from that point of time onwards.

Technical Interpretation - External

9 April 2018 External T.I. 2017-0714381E5 F - Application de l'article 67.1

Unedited CRA Tags
67.1
Summary Under
Tax Topics - Income Tax Act - Section 67.1 - Subsection 67.1(1)
hockey game tickets purchased by a hockey player recruiter are subject to s. 67.1
Words and Phrases
entertainment

Principales Questions: 1) Est-ce qu’une allocation pour frais de repas est assujettie à l’article 67.1?
2) Est-ce que les sommes payées par un recruteur de joueurs de hockey pour l’achat de billets pour assister à des parties de hockey sont assujetties à l’article 67.1?
3) Est-ce qu’un gala ou une soirée reconnaissance organisé par une association professionnelle est un divertissement aux fins de l’article 67.1?
1) Is a meal allowance subject to section 67.1?
2) Are amounts paid by a recruiter of hockey players for the purchase of tickets to attend hockey games subject to section 67.1?
3) Is an event such as a gala organized by a professional association an entertainment for the purposes of section 67.1?

Position Adoptée: 1) Oui / Yes 2) Oui / Yes 3) Aucune / None

Raisons: 1) Une allocation de déplacement ou une partie d’une allocation de déplacement versée à un employé, représentant des montants payés ou payables pour des aliments, des boissons ou des divertissements, est sujette à la restriction prévue à l’article 67.1 à moins que les exceptions prévues au paragraphe 67.1(2) puissent s’appliquer.
2) Les sommes payées pour l’achat de billets notamment pour un événement sportif sont des frais de divertissement. Puisqu’une partie de hockey est un événement sportif, les sommes payées par un recruteur de joueurs de hockey pour l’achat de billets pour assister à des parties de hockey sont assujetties à l’article 67.1.
3) Question de fait.
1) A travel allowance or a portion of a travel allowance paid to an employee that represents amounts paid or payable for food, beverages or entertainment is subject to section 67.1 unless subsection 67.1(2) applies.
2) Amounts paid for tickets, among other thing for a sporting event, are entertainment expenses. Since a hockey game is a sporting event, the amount paid by a hockey player’s recruiter for hockey games tickets is subject to section 67.1.
3) Question of fact.

28 March 2018 External T.I. 2016-0675551E5 - Tuition and Education Tax Credit

Unedited CRA Tags
118.5(1), 118.6(1), 118.6(2)

Principal Issues: Are individuals who are taking the XXXXXXXXXX eligible for the tuition tax credit and for 2016 and prior years eligible for the education tax credit?

Position: Question of fact and depends if all the requirements in subsection 118.5(1) and for 2016 and prior years if the requirements in subsection 118.6(2) are met. One criteria that must be met in order for the tuition to qualify for the TTC is that tuition fees that are paid to a university, college or other educational institution in Canada must be at a post-secondary level (for tax years prior to 2017).

Reasons: The University would need to determine whether the XXXXXXXXXX offers courses at the post-secondary level (for tax years prior to 2017).

Technical Interpretation - Internal

9 April 2018 Internal T.I. 2017-0731251I7 F - Activités mondaines

Unedited CRA Tags
6(1)a)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a)
computation of the $150 cost per employee safe harbour for employee parties

Principales Questions: Demande de précision sur notre position à l’effet qu’il n’y a pas d’avantage imposable à inclure dans le revenu des employés lorsqu’un employeur offre gratuitement, à tous ses employés, une soirée ou autre activité mondaine dont le coût par personne pour la soirée ou l’activité mondaine ne dépasse pas 150 $. / Request for clarification regarding our position that there is no taxable benefit to be included in the calculation of employees’ income when an employer offers free of charge, to all it’s employees, a party or other social event whose cost per person for the party or social event does not exceed $150.

Position Adoptée: Le coût « par personne » de 150 $ est calculé en fonction du nombre total de personnes présentes à la soirée ou à l’activité mondaine. Lorsque le coût pour la soirée ou l’activité mondaine dépasse 150 $ par personne présente, nous sommes d’avis qu’une personne qui a été invitée à une soirée ou à une activité mondaine mais qui n’y est pas présente n’a pas reçu ni n’a joui d’un avantage. / The cost "per person" of $ 150 is calculated based on the total number of attendees at the party or the social event. When the cost for the party or social event exceeds $ 150 per attendee, we are of the view that a person who is invited to a party or social event but does not attend has not received or enjoyed a benefit.

Raisons: Position de l’ARC et libellé de l’alinéa 6(1)a). / CRA’s position and the wording of the Act.