Income Tax Severed Letters - 2019-08-28


2019 Ruling 2018-0789981R3 - 55(3)(a) Reorganization

Unedited CRA Tags
51(1), 55(2), 55(3)(a), 84(3), 85(1), 112, 187.1, 191

Principal Issues: Whether the reorganization meets the requirements of paragraph 55(3)(a).

Position: Yes.

Reasons: Meets legislative requirements.

Ministerial Correspondence

29 July 2019 Ministerial Correspondence 2019-0813831M4 F - Prélèvement des impôts aux Indiens

Unedited CRA Tags
2(1), 81(1)a) LIR et 2(1) and 87(1)b) de la Loi sur les Indiens

Principales Questions: Le contribuable nous soumet ses préoccupations à l’égard de l’imposition des Indiens. The taxpayer submits his concerns regarding the taxation of Indians.

Position Adoptée: Un Indien est assujetti aux mêmes règles que tous les résidents Canadiens en ce qui concerne l’impôt, sauf si son revenu est exonéré d’impôt comme le prévoit l’article 87. Indigenous individuals pay taxes and are taxed in the same way as all Canadian residents, except when the tax exemption provided in the Indian Act applies.

Raisons: Paragraphe 2(1) de la LIR et alinéa 87(1)b) de la Loi sur les Indiens. Subsection 2(1) of the ITA and paragraph 87(1)(b) of the Indian Act.

Technical Interpretation - External

31 July 2019 External T.I. 2019-0812161E5 - Pulsed electromagnetic field therapy devices

Unedited CRA Tags
Section 5700 of the Income Tax Regulations

Principal Issues: The taxpayer's request seeks a) clarifications regarding technical interpretation 2019-079898; and b) the support of the Income Tax Rulings Directorate for the purpose of requesting that a new category of devices eligible for the medical expense tax credit be added to section 5700 of the Income Tax Regulations.

Position: a) Clarifications provided; and b) The Income Tax Rulings Directorate is not in a position to support requests from taxpayers seeking changes to tax policy from the Department of Finance Canada.

Reasons: a) See response; b) the values and expected behaviours that guide public servants in general, and Canada Revenue Agency employees in specific, in all activities related to their professional duties - see the Canada Revenue Agency's Code of integrity and professional conduct (regarding impartiality) and the Values and Ethics Code for the Public Sector.

30 July 2019 External T.I. 2019-0804961E5 - Child care expenses - Meaning of other remuneration

Unedited CRA Tags
63(3)(a); 63(3)(d); 6(1)(c); 12(1)(j); 153(1)(a)

Principal Issues: Whether a dividend would be considered "other remuneration" for the purpose of paragraph (a) of the definition of “earned income” in subsection 63(3) of the Act.

Position: No.

Reasons: Based on jurisprudence, the allocation of a corporation’s profits to shareholders by dividends does not, in law, constitute remuneration for their work. Also, a dividend commonly constitutes return on capital which attaches to a share.

3 July 2019 External T.I. 2018-0781941E5 - Foreign retirement plans (Ireland)

Unedited CRA Tags
56(1)(a); 248(1) "employee benefit plan"; 6(1)(g); Canada-Ireland Income Tax Convention
employer contributions to a predecessor fund are insufficient to give rise to superannuation or pension benefits
distribution out of fund that only received employer contributions indirectly through predecessor fund did not qualify as being from EBP

Principal Issues: Whether a Personal Retirement Savings Account or an Approved Retirement Fund established under the income tax law of Ireland is a pension plan, or an employee benefit plan, for the purposes of the Act.

Position: No.

Reasons: No employer contributions have been made to the PRSA or the ARF.