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.
XXXX R.B. Day (613) 995-1723
Dear
Thank you for your letter of March 16, 1984 wherein you requested an opinion regarding the treatment, for income tax purposes, of computer systems to be used in pharmacies.
As indicated in paragraph 41 of IT-145R , the mixing of various liquids or compounds when preparing a drug prescription is considered to constitute manufacturing and processing; whereas the filling of prescriptions by placing pills, capsules or liquids purchased in bulk into small containers and labelling them is not considered to qualify as manufacturing and processing.
The question of whether or not a computer system acquired by a pharmacy is eligible for the accelerated write-off provisions of class 29 to Schedule II of the Income Tax Regulations would depend on whether or not the computer was used primarily (i.e. - more than 50% of the time) in manufacturing and processing activities of the pharmacy.
As such a determination involves a finding of fact taking into consideration the actual use of a computer in a particular situation, we regret we are not able to answer your specific questions. However, we can state that the Department considers that the use of a computer in manufacturing and processing includes direct manufacturing and processing applications and ancillary activities such as maintaining inventory records, production scheduling and control, but does not include the maintenance of financial and accounting information such as accounts receivable and payable records, general ledger records, payroll records, customer lists and sales invoices and analysis.
We trust that the above information will be of assistance to you.
Yours truly,
for Director Corporate Rulings Division Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1984
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1984
Email this Content