Income Tax Severed Letters - 2023-06-21

Ruling

2023 Ruling 2022-0948091R3 - Post-mortem pipeline

Unedited CRA Tags
84(2), 84.1, 245(2)

Principal Issues: Post-mortem pipeline ruling.

Position: Favourable rulings issued.

Reasons: In accordance with the Act and our published positions.

2021 Ruling 2019-0800191R3 - Carrying on business in Canada.

Unedited CRA Tags
2(3)(b); 115(1); 248(1) “business”; 253.
Summary Under
Tax Topics - Income Tax Act - Section 2 - Subsection 2(3) - Paragraph 2(3)(b)
a Canadian sub providing computer and admin/ marketing support services to its non-resident parent would not cause the parent to carry on business in Canada
Summary Under
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii)
provision of support services to NR parent did not cause the parent to carry on business in Canada

Principal Issues: Whether the provision of XXXXXXXXXX services by a Canadian-resident corporation to related non-resident entities will cause the related non-resident entities to be considered to carry on business in Canada.

Position: No.

Reasons: XXXXXXXXXX.

2021 Ruling 2019-0832651R3 - XXXXXXXXXX

Unedited CRA Tags
Ss. 2(3), 104(1), 115(1)(b), 116, 215, 230(1) Income Tax Act; XXXXXXXXXX

Principal Issues: Canadian tax treatment of dividends paid on Canadian securities that are part of the assets of a particular XXXXXXXXXX taking the form of a contractual fund.

Position: Such dividends will be exempt from Canadian tax imposed by paragraph 212(2) of the Act by virtue of XXXXXXXXXX of the Treaty.

Reasons: Application of the Act and the Treaty.

Technical Interpretation - External

12 April 2023 External T.I. 2023-0960541E5 - FHSA - First-Time Home Buyer status

Unedited CRA Tags
146.6(1), 146.01(2)(a.1).

Principal Issues: (1) Can an individual who resides in a housing unit of which their spouse is the sole owner be a "qualifying individual" eligible to open a FHSA? (2) Can a FHSA holder who enters into a spousal or common law relationship with a home owner after opening the FHSA nevertheless make a "qualifying withdrawal" from their FHSA to purchase a housing unit in which both they and their spouse will reside?

Position: (1) No. (2) Yes.

Reasons: The "qualifying individual" definition in subsection 146.6(1) includes the condition that the taxpayer has not inhabited as a principal place of residence a housing unit that either the taxpayer or their spouse (or common law partner) at that time owns during the calendar year or the previous four calendar years. In contrast, the "qualifying withdrawal" definition does not consider the home ownership status of the FHSA holder's spouse or common law partner.

Conference

15 September 2020 IFA Roundtable Q. 7, 2020-0853571C6 - Regulation 5901(2)(b) Pre-Acquisition Surplus Election

Unedited CRA Tags
Regulation 5901(2)(b)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 5901 - Subsection 5901(2) - Paragraph 5901(2)(b) - Subparagraph 5901(2)(b)(ii)
Reg. 5901(2)(b)(ii)(A) does not taint a siloed dividend paid by FA to Canco1 even though another Canco holds other FA shares through an LP

Principal Issues: Whether a Canadian corporation (Canco1) is eligible to make an election under paragraph 5901(2)(b) of the Regulations in respect of a dividend paid to it by a foreign affiliate of Canco1 (FA) on a particular class of shares when a separate class of shares of FA is owned by a partnership (LP).

Position: Yes.

Reasons: Textual, contextual and purposive interpretation of paragraph 5901(2)(b) of the Regulations.