Income Tax Severed Letters - 2024-05-08

Ministerial Correspondence

26 October 2023 Ministerial Correspondence 2023-0984161M4 - Motor vehicle allowance rates for small businesses

Unedited CRA Tags
Reg 7306

Principal Issues: Correspondence from federal MP asking the Minister to increase the per-kilometre rates that the CRA usually considers reasonable.

Position: The per-kilometre rates that the CRA usually considers reasonable are amounts prescribed in section 7306 of the Income Tax Regulations. However, depending on the facts of a particular situation, other amounts may also be considered to be reasonable.

Reasons: See above.

Technical Interpretation - External

30 January 2024 External T.I. 2024-1005011E5 - Safe income

Unedited CRA Tags
dividend income that has not been subject to tax should not constitute safe income, and double taxation can be avoided with proper structuring

Principal Issues: Clarification on various topics discussed in paper "CRA Update on Subsection 55(2) and Safe Income".

Position: See below.

Reasons: See below.

Technical Interpretation - Internal

4 March 2023 Internal T.I. 2023-0994501I7 - Non-resident non-arm's length transfer of property

Unedited CRA Tags
13(7)(e), 248(1) - definition of taxpayer, 54 - definition of capital property, 13(21) - definition of depreciable property, 20(1)(a), ITR 1102(3)
s. 13(7)(e)(ii) applies to the purchase of a depreciable property from a non-arm’s length non-resident corporation with no tax nexus to Canada
Oceanspan inapplicable where the non-resident’s Canadian tax status is not relevant to the purpose of the provision