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.
Dear Sirs:
This is in reply to your letter of July 10, 1989. You have requested clarification of the Department's basis for the position it took in its response to question no. 41 at the 1988 Revenue Canada Round Table, Specifically, in your view when a licence agreement gives a Canadian end-user of Computer software the right to make copies for internal use, the payment under the licence agreement, made to a resident of the United States, should qualify for an exemption from Canadian withholding tax under subparagraph 212(1)(d)(vi) of the Income Tax Act (the "Act") and paragraph 3 o.f Article XII of the Canada-U.S, Income Tax Convention (1980) (the "Treaty").
In our view, any computer software payment that can reasonably be considered to be on or in respect of a copyright in respect of the production or reproduction of the software does qualify for an exemption from Canadian withholding tax under subparagraph 212(1)(d)(vi) of the Act and under Article XII of the Treaty. However, it is our view that in all cases involving an end-user, a software licence payment would be entirely in satisfaction of benefits derived by that end-user from his use of the software. Accordingly, the payment would not qualify for exemption from Canadian withholding tax under subparagraph 212(1)(d)(vi) of the Act or Article XII of the Treaty.
If you feel that you are aware of a situation where this is not the case, the Department is prepared to review your representation along with a copy of the licencing agreement in question.
We trust this is the information you require.
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© Her Majesty the Queen in Right of Canada, 1989
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, 1989
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