19 June 1992 Income Tax Severed Letter 9215455 - International Financial Business (Tax Refund) Act of B.C.

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

SUBJECT: INTERNATIONAL FINANCIAL BUSINESS (TAX REFUND)ACT OF B.C. SECTION: 12(2.2), 12(1)(x), 6(1)(a)]

• 5- 921545 Kevin J.Donnelly (613) 957-3500

June 19, 1992

Dear XXX:

We are replying to your letter dated May 14, 1992 with respect to the taxation of refunds of provincial income tax paid by the Province of British Columbia to qualifying corporations and individuals in accordance with the applicable provisions of the International Financial Business (Tax Refund) Act of British Columbia ( the "Tax Refund Act").

As you indicated in your June 10 telephone conversation with Kevin Donnelly, certain taxpayers have already received refunds and may also be in contact with our Vancouver District Office with respect to the Taxation of these refunds. Consequently, in actual cases such as this, we can only comment generally on our interpretation of the law as it is the prerogative of our District Offices to review completed transactions and make determinations in light of the facts of each case.

In general, it is our opinion that the provisions of paragraph 12(1)(x) of the Income Tax Act (the " Act") would require a corporate taxpayer to include in income the provincial tax refund received under the Tax Refund Act.

However, if the taxpayer makes the election provided for in subsection 12(2.2) of the Act, in respect of the full amount of the tax refund received, the amount elected on would reduce the amount received so that no part of the refund would have to be included in income under paragraph 12(1)(x) of the Act.

Paragraphs 5(1)(b) and (c) of the Tax Refund Act, provide for certain individuals to receive refunds in respect of provincial tax paid to them on income earned from employment with a registered financial institution. Taxation of these tax refunds under the Act requires further consideration. We are referring the issue to Mr. Paul Fouco, Chief of our Personal and General section, phone number (613) 957-2141 , who will write to you as soon as the Departments position is finalized.

The foregoing is only an expression of general opinion and does not constitute a binding ruling by the Department with respect to the taxation of any refunds received by any taxpayers.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate