21 March 1990 Administrative Letter 90M03256 F - Request for Remission of Tax

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.

I am writing to further the Honourable Otto Jelinek's letter of January 9, 1990, concerning your request for remission of tax on behalf of 24(1) .  I apologize for the delay in responding.

You have indicated that, as a result of the enactment of subsection 250(5) of the Income Tax Act 24(1) .  In accordance with your request, we have consulted with the Department of Finance.

Your client's case has been thoroughly reviewed and compared with the guidelines for recommending remissions.  However, after a careful consideration of the matters raised by you, I regret to advise that the measure of relief you are seeking cannot be granted.

A resident corporation may be taxable only on its Canadian source income by virtue of the protection afforded under a tax treaty. Prior to the introduction of subsection 250(5) of the Act, such a corporation could take advantage of tax provisions intended for application to resident corporations that are taxable on world income.  Subsection 250(5) provides a treatment under the Act that is consistent with that under applicable tax treaties.

The legislative change in 1985 corrected an inappropriate result. The preservation of such result would be inconsistent with the purpose of the remission procedure.

I would like to thank you for writing and I trust that the foregoing comments explain the Department's position.

Yours sincerely,

R.J.L. ReadActing Assistant Deputy MinisterLegislative and Intergovernmental Affairs Branch

SP/lcc 19(1) (57-57.1)(Min A - Tech)March 19, 1990Sandy Parnanzone - 957-9232

c.c. Calgary District Office