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.
5-8648
Dear Sirs:
Re: Article 13 of the Canada-United Kingdom Income Tax Convention (the "Treaty")
This is in reply to your letter dated August 31, 1989 whereby you requested our opinion concerning the application of paragraph 7(b) of Article 13 of the Treaty to a mine and a mill. We apologize for the delay in responding to your inquiry which arose because we considered it necessary to undertake consultations with the Department of Finance in connection with this matter.
In our opinion, a mine and a mill (used to process the ore from the mine) owned and operated by a company to conduct its mining business would constitute "property in which the business of the company was carried on" within the meaning of subparagraph 7(b) of Article 13 of the Treaty, provided the mine is not in respect of petroleum, natural gas or other related hydrocarbons referred to in paragraph 4 of Article 13. We note that coal is a "related hydrocarbon.
A determination of from where shares of a company derive their value or the greater part of their value is essentially a question of fact to be determined after consideration of all relevant facts including the manner in which the assets of the company are financed.
Yours truly,
for DirectorReorganizations and Non Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Sa Majesté la Reine du Chef du Canada, 1991
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