Income Tax Severed Letters - 2024-05-29


2023 Ruling 2022-0958521R3 - foreign absorptive mergers

Unedited CRA Tags
section 54 “adjusted cost base”; paragraph 69(1)(b); subsections 87(4); 87(8); 87(8.1); 87(8.2); 248(1) “disposition”; and 248(1) “taxable Canadian property”; Article XIII of the XXXXXXXXXX Treaty.
rulings on foreign absorptive downstream and upstream mergers
disposition of shares of companies resident in third countries and which were taxable Canadian property was exempted under XIII(4) of the Canada-US Treaty

Principal Issues: 1. Does subsection 87(4) apply to each of the foreign absorptive mergers? 2. Will there be a disposition of assets for Canadian tax purposes by a surviving corporation in the foreign absorptive mergers? 3. Does the XXXXXXXXXX Treaty apply to gains, if any, realized on certain share transfers? 4. Will certain transactions be excluded from the definition of "disposition" in subsection 248(1)?

Position: 1. Yes. 2. No. 3. Yes. 4. Yes.

Reasons: 1. Each of the foreign absorptive mergers meet the conditions required for subsection 87(4) to apply. 2. The surviving corporations in each of the foreign absorptive mergers do not cease to exist under the relevant foreign law. 3. The gains, if any, realized on the share transfers are only taxable in the XXXXXXXXXX in accordance with Article XIII(4) of the XXXXXXXXXX Treaty. 4. The transactions are excluded from the definition of disposition in subsection 248(1) in accordance with paragraph (n) of that definition.

2023 Ruling 2023-0964601R3 - Loss consolidation arrangement

Unedited CRA Tags
18.2, 20(1)(c), 55(2), 111, 112(1), 112(2.1), 112(2.2), 112(2.3), 112(2.4), 186(1), 187.1, 187.2, 191(2)(a), 191(3), 245(2)
multiple use of daylight loan from NAL lender re loss shift from Lossco subs to Profitco sub
in-house re-circulating daylight loan used to fund a loss-shifting transaction

Principal Issues: Whether the loss consolidation arrangement is acceptable.

Position: Yes.

Reasons: The proposed transactions conform to our requirements for these types of loss consolidation rulings. The proposed transactions would be legally effective and commercially plausible.

Technical Interpretation - External

14 March 2024 External T.I. 2015-0596761E5 F - Traitement fiscal

Unedited CRA Tags
6(1)k)(i), 9(1), 18(1)b), 18(9)
practice is not to apply s. 18(9) where the adjustments would be minimal
mandatory requirement for employee notification to employer by end of year

Principal Issues: 1. Quel est le traitement fiscal d’une dépense engagée ou effectuée par un contribuable pour le marquage antivol d’une automobile utilisée dans l’exploitation d’une entreprise? 2. Si la dépense pour le marquage antivol d’une automobile est de nature courante, est-ce que le paragraphe 18(9) s’applique? 3. Est-ce qu’un employé peut se prévaloir de la méthode de calcul de l’avantage relatif aux frais de fonctionnement d’une automobile prévue au sous alinéa (i) de l’élément A de l’alinéa 6(1)k) de la Loi après la fin d’une année donnée en avisant par écrit, après la fin de cette année donnée, son employeur de son intention de s’en prévaloir? / 1. What is the tax treatment of an expense incurred or made by a taxpayer for the anti-theft marking of an automobile used in the carrying on of a business? 2. If the expense for the anti-theft marking of an automobile is of a current nature, does subsection 18(9) apply? 3. Whether an employee may take advantage of the method of calculating the automobile operating expense benefit provided for in subparagraph (iv) of the element A in paragraph 6(1)(k) of the Act after the end of a given year by notifying his employer in writing, after the end of that given year, of his intention to take advantage of it.

Position: 1. Aucune. 2. Bien que le paragraphe 18(9) pourrait trouver application dans une situation où la dépense de marquage antivol se rapporte manifestement à des périodes ultérieures, la pratique actuelle consiste toutefois à ne pas tenir compte des rajustements pour des montants minimes. 3. Non. / 1. None. 2. Although subsection 18(9) could be applied in a situation where the anti-theft marking expense clearly relates to future periods, current practice is to disregard adjustments for minimal amounts. 3. No.

1. Question de fait. 2. Position administrative. 3. Libellé de la Loi. / 1. Question of fact. 2. Administrative position. 3. Wording of the Act.