Income Tax Severed Letters - 2025-08-06

Technical Interpretation - External

4 June 2025 External T.I. 2024-1039701E5 - Subparagraph 212.3(7) and Part XIII

Unedited CRA Tags
212.3(7)(d)(ii), 227(8.3), 227(6.2), 227(10), 227(10.1)
Summary Under
Tax Topics - Income Tax Act - Section 212.3 - Subsection 212.3(7) - Paragraph 212.3(7)(d)
CRIC’s s. 215(1) liability for failure to timely file a s. 212.3(7)(d)(i) offset form can be eliminated though late-filing of form
Words and Phrases
amount payable
Summary Under
Tax Topics - Income Tax Act - Section 227 - Subsection 227(10)
there is no need to assess a CRIC whose s. 212.3(7)(d) liability for failure to use its cross-border PUC has been eliminated through a late s. 212.3(7)(d)(i) filing
Summary Under
Tax Topics - Income Tax Act - Section 227 - Subsection 227(8.3) - Paragraph 227(8.3)(b)
s. 227(8.3)(b) interest where late-filing of s. 212.3(7)(d)(i) offset form

Principal Issues: Whether an assessment of Part XIII tax under subsection 227(10) or 227(10.1) in respect of a deemed dividend under the foreign affiliate dumping rules can be made in a situation where the information under subparagraph 212.3(7)(d)(i) is provided after its filing-due date, causing paragraph 227(6.2)(c) to deem the unpaid Part XIII tax liability on the resulting deemed dividend under subparagraph 212.3(7)(d)(ii) to have been paid.

Position: Yes.

Reasons: Based on the wording of the legislation, the Minister has the discretion to make, at any time, an assessment under subsection 227(10) and (10.1), but not a requirement to do so. Therefore, if a Part XIII tax liability has previously been settled by a remittance (deemed or actual) of tax withheld, the Minister may choose not to issue an assessment of that Part XIII assessment as there is no unpaid balance owing, and therefore nothing required to be collected.

6 May 2025 External T.I. 2025-1062111E5 - Cost of Automated Cyclers as a Medical Expense

Unedited CRA Tags
118.2(2)(i)

Principal Issues: Whether the statement made in document 2023-0974081E5 which stated that an automated cycler used for peritoneal dialysis did not appear to be an ‘artificial kidney machine’ under 118.2(2)(i) or a device that is described in the Act or Regulations is correct?

Position: The statement made in document 2023-0974081E5 regarding automated cyclers appears to have been made in error.

Reasons: Previous positions have historically viewed an automated cycler machine that is used for peritoneal dialysis to be an artificial kidney machine as contemplated in paragraph 118.2(2)(i).

6 May 2025 External T.I. 2024-1010641E5 F - Relevant Group Entity

Unedited CRA Tags
84.1(1); 84.1(2)e); 84.1(2.31); 110.6(1); 125(1) and ( 7); 129(1), (4) and (6); 248(1)
Summary Under
Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(2.31) - Paragraph 84.1(2.31)(c) - Subparagraph 84.1(2.31)(c)(iii)
the retention of Opco’s real estate in the parent’s Realtyco after a sale of Opco to the child’s Holdco does not render Realtyco a relevant group entity

Principales Questions: Whether a corporation holding a rental property ("Holdco") that is rented to another corporation carrying on an active business to which it is related and associated ("Opco") qualifies as a relevant group entity, as defined in subparagraph 84.1(2.31)c)(iii), for the purpose of the immediate intergenerational business transfer rules found in subsection 84.1(2.31) in respect of three different factual scenarios.

Position Adoptée: No.

Raisons: In all three scenarios, the rental business, if any, carried on by Holdco would not be relevant in determining whether the Opco shares would qualify as QSBC shares at the time of a disposition of the Opco shares.