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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
This is in reply to your letter dated February 8, 1993, wherein you requested an interpretation with respect to the application of subsection 18(2) of the Income Tax Act (the "Act") for taxation years ending before 1992. We apologize for the delay in replying to your request.
Subsection 18(6) of S.C. 1988, c. 55 provides for transitional rules for taxation years ending before 1992.
You gave the example of a company with an October 31 year end. In its year ended October 31, 1991, the company can claim that proportion of 20% of the excess amount determined under paragraph 18(2)(g) of the Act that the number of days in the year that are after 1990 and before 1992 (i.e. from January 1, 1991 to October 31, 1991) is of the number of days in the year. It can also deduct the proportion of 40% of the excess amount that the number of days after 1989 and before 1991 (i.e. from November 1, 1990 to December 31, 1990) is of the number of days in the year. As no excess amounts are deductible for taxation years ending in 1992 and subsequent, no deduction will be allowed for the days from November 1, 1991 to December 31, 1991 which fall in the 1992 taxation year.
We trust that these comments will be satisfactory.
Yours truly,
For Director Manufacturing Industries, Partnerships and Trusts DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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