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.
This is in reply to your memorandum of March 3, 1988 wherein you questioned whether our Division has altered its position concerning the treatment of payments to non-residents for the use of computer software in view of the Apple Computers Inc. et al v. Mackintosh Computers Ltd., et al case, and the proposed amendments to the Copyright Act introduced by Bill C-60.
The appeal in the above case was heard in the Supreme Court of Canada on February 22, 1988 and no judgement has been handed down by the Court as of this date.
It is our understanding that Bill C-60 received second reading in the House of Commons on February 11, 1988 and has been sent to the House of Commons Standing Committee.
We propose to review our position on the treatment of software payments made to non-residents of Canada at the earlier of the date when the Apple Computers Inc. et al v. Mackintosh Computers Ltd., et al case is decided or the proposed amendments to the Copyright Act receive Royal Assent.
Accordingly, our position continues to be that payments made to non-residents for the use of computer software are subject to withholding tax by virtue of subparagraph 212(1)(d)(i) of the Act and such payments do not fall within the exemption set out in subparagraph 212(1)(d)(vi) of the Act.
We trust this is adequate for your purposes.
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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