Income Tax Severed Letters - 2019-07-17

Ministerial Correspondence

1 May 2019 Ministerial Correspondence 2019-0797701M4 F - CIPH

Unedited CRA Tags
118.3(2)

Principales Questions: Demande liée au refus de l’ARC d’accorder le transfert de la fraction inutilisée du CIPH à des commettants du demandeur. / Request related to the CRA's refusal to grant the transfer of the unused portion of the DTC to requestor's constituents.

Position Adoptée: Aucune / None

Raisons: Commentaires généraux fournis. / General comments provided.

Technical Interpretation - External

6 June 2019 External T.I. 2019-0795751E5 - 129(6) - multiple tax years

Unedited CRA Tags
129(6)
Summary Under
Tax Topics - Income Tax Act - Section 129 - Subsection 129(6)
deemed business income arises during taxation year of associated payer rather than payee

Principal Issues: Where two corporations are associated for only the first 3 months of ACo's tax year, whether, for the purpose of section 125, all the income for ACo's entire year will be deemed to be active income by subsection 129(6).

Position: Only income for the period during which the corporations are associated will be deemed to be active income.

Reasons: The legislation.

20 March 2019 External T.I. 2018-0780601E5 - Prescribed Prize - the XXXXXXXXXX

Unedited CRA Tags
56(1)(n); 56(3); Regulation 7700

Principal Issues: Whether a particular prize (the XXXXXXXXXX) meets the definition of a prescribed prize under Section 7700 of the Income Tax Regulations.

Position: Likely yes.

Reasons: Legislation and previous positions.

Technical Interpretation - Internal

30 April 2019 Internal T.I. 2018-0757591I7 F - Part IV tax and trust

Unedited CRA Tags
12(1)(j), 84(1), 84(2), 84.1(1)(b), 104(13), 104(19), 108(5), 186
Summary Under
Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) - Paragraph 186(1)(a)
a dividend received by a trust and immediately paid to a connected corporate beneficiary was taxed under Part IV if the connection ceased before the trust year end
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(19)
s. 104(19)-designated dividend not received as dividend until trust year end

Principal Issues: 1. When would a taxable dividend designated in respect of a beneficiary of a trust pursuant to subsection 104(19) be considered to have been received by the beneficiary? 2. Would a corporate beneficiary of the trust and a corporate dividend payer to the trust be connected with respect to the dividend designated under subsection 104(19)?

Position: 1. At the time that is the end of the taxation year of the trust in which the dividend was received by the trust. 2. Question of fact.

Reasons: 1 and 2. Application of the Act and previous positions.

7 March 2019 Internal T.I. 2018-0781511I7 F - Fabrication ou transformation

Unedited CRA Tags
125.1(1), 125.1(3)
Summary Under
Tax Topics - Income Tax Act - Section 125.1 - Subsection 125.1(3) - Canadian Manufacturing and Processing Profits
commercial printing or photocopying operations may not be M&P
Summary Under
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 29
printing or photocopying operations may no longer be manufacturing or processing

Principales Questions: Est-ce que la position prise dans le document F9406917, voulant qu'une entreprise de photocopies puisse constituer une entreprise de fabrication ou transformation, reflète toujours la position de l'ARC? // Does the technical position in F9406917 to the effect that a photocopy business could qualify as "manufacturing or processing" still reflect CRA's position?

Position Adoptée: La position ne peut être confirmée ou infirmée. // The position cannot be validated or invalidated.

Raisons: Depuis la publication de cette interprétation, le IT-145R a été annulé et remplacé par le Folio S4-F15-C1 en 2016. De plus, il y a eu de la nouvelle jurisprudence émanant de la Cour suprême du Canada sur le sujet en 2000. // Since the publication of this interpretation, IT-145R was cancelled and replaced with Folio S4-F15-C1 in 2016. Furthermore, there was new jurisprudence from the SCC on the subject in 2000.