Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Supplemental ruling to 2023-098066.
Position: Supplemental ruling given.
Reasons: The changes don't impact the rulings given in 2023-098066.
XXXXXXXXXX 2024-102189
XXXXXXXXXX, 2024
Dear XXXXXXXXXX:
Re: Supplemental Income Tax Ruling Request
XXXXXXXXXX
This is in reply to your email dated XXXXXXXXXX. It is supplemental to our advance income tax ruling number 2023-098066 (the Ruling Letter) that was issued to the above-captioned taxpayers on XXXXXXXXXX. We also acknowledge the additional information provided to us in subsequent correspondence and during our various telephone conversations. The information that you provided in such correspondence and in the telephone discussions form part of this letter only to the extent described herein.
You indicated that certain Proposed Transactions described in the Ruling Letter have been completed. As requested, these particular amendments (the Amendments), as set out below in this letter (Supplemental Ruling Letter), are hereby made to the Ruling Letter.
Unless otherwise defined herein, all capitalized terms in the Supplemental Ruling Letter have the meanings assigned to them in the Ruling Letter, and, where the circumstances so require, the singular should be read as plural and vice versa.
RULING LETTER – DEFINITIONS
1. The definition of “Eco” is amended by removing the words “, as described in Paragraph 36”.
2. The definition of “Eco Assets” is removed.
3. The definition of “Eco Assets Distribution” is removed.
4. The definition of “Eco Class A and B Common Shares” is removed.
5. The definition of “Eco Class A and B Special Shares” is removed.
6. The definition of “Eco Note” is removed.
7. The definition of “Fourth Reorganization” is removed.
8. The definition of “Rollovers” is amended by removing the words “and in Paragraphs 66 to 68 (the “Third Rollover”)”.
9. The definition of “Second Amalgamation” is removed.
10. The definition of “TC1 Note 3” is removed.
11. The definition of “TC3 Amalco” is removed.
12. The definition of “TC3 Amalco Predecessor Corporations” is removed.
RULING LETTER – FACTS
13. Paragraph 15 is amended by adding the words “inventory, prepaid expenses, an amount due from Individual B,” immediately after the words “Bco’s assets are comprised of”.
14. Paragraph 16 is amended by removing the words “long term debt and an amount owing to Individual B” and replacing them with the words “accounts payable and accrued liabilities, taxes payable and an amount due to Eco”.
15. Paragraph 23 is amended by adding the words “and inventory”.
16. Paragraph 24 is amended by adding the words “and an amount due to Eco”.
17. The heading “Eco” is removed immediately before Paragraph 36. Paragraph 36 through to Paragraph 44 are removed and replaced with the term “Reserved”.
RULING LETTER – COMPLETED TRANSACTIONS
18. Immediately following Paragraph 51, a new heading entitled “COMPLETED TRANSACTIONS” is inserted, and new Paragraphs 51.1. and 51.2. are added as follows:
51. 1. On XXXXXXXXXX, Individual B incorporated TC1 and TC2 under Act 2.
51. 2. On XXXXXXXXXX, Individual C incorporated TC3, TC4, TC5 and TC6 under Act 2.
RULING LETTER – PROPOSED TRANSACTIONS
19. New Paragraphs 52.1. through to 52.3. are added immediately before Paragraph 52 as follows:
52. 1. Bco will borrow from a third-party lender and use such cash to repay certain balances owing to Eco.
52. 2. Cco will borrow from a third-party lender as well as liquidate certain marketable securities and use such cash to repay balances owing to Eco.
52. 3. Eco will use the cash received in Paragraphs 52.1. and 52.2. to repay certain balances owing to Dco.
20. Paragraph 56 is removed and replaced with the term “Reserved”.
21. Paragraph 58 is amended by removing the words “on the incorporation of TC1 and TC2”.
22. Paragraph 60 is amended by removing the words “on the incorporation of TC3, TC4, TC5 and TC6”.
23. The heading “Third Rollover” is removed immediately before Paragraph 66. Paragraph 66 through to Paragraph 68 are removed and replaced with the term “Reserved”.
24. The heading “Fourth Reorganization” is removed immediately before Paragraph 89. Paragraph 89 through to Paragraph 92 are removed and replaced with the term “Reserved”.
25. The heading “Second Amalgamation” is removed immediately before Paragraph 96. Paragraph 96 through to Paragraph 98 are removed and replaced with the term “Reserved”.
26. Paragraph 106 and Paragraph 107 are removed and replaced with the term “Reserved”.
RULING LETTER – PURPOSE OF THE PROPOSED TRANSACTIONS
27. Paragraph 111 is amended by removing the words “and the Fourth Reorganization”.
28. Paragraph 112 is amended by removing the words “and the Fourth Reorganization” and “and Eco”.
29. Paragraph 113 is amended by removing the words “and Second Amalgamation”.
RULING LETTER – RULINGS GIVEN
20. Ruling Ae) is removed and replaced with the term “Reserved”.
21. Ruling Af) is removed and replaced with the term “Reserved”.
CONFIRMATION
Provided that the preceding statements and the statements contained in the Ruling Letter constitute a complete and accurate disclosure of all the relevant facts and proposed transactions and of the purposes of the Proposed Transactions and the Amendments, notwithstanding the Amendments, we hereby confirm that, subject to the conditions, limitations, qualifications and comments set out in the Ruling Letter and in Information Circular 70-6R12 dated April 1, 2022, the Rulings given in the Ruling Letter will continue to be binding on the CRA.
Yours truly,
XXXXXXXXXX
for Division Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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