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:
RE: Clause 212(1)(b)(vii)
We are replying to your letter dated May 27, 1993 concerning the application of clause 212(1)(b)(vii) of the Income Tax Act (the "Act") to situations involving the borrowing of foreign currencies by a Canadian corporation from non-residents.
In order to properly address the situations described in your letter, we believe that a review of applicable documentation would be required,thus necessitating an advance ruling request. Consequently, at this time we can only address your concern by referring you to the Department's general positions set out in Interpretation Bulletins IT- 361R2 and IT-448.
In reviewing multi-currency transactions our main concerns would include, whether or not the transactions give rise to new loans, if there is a settlement of debt without any payment or by the payment of an amount less than the principal amount of the debt when loans in one currency are converted into other currencies and are there related hedging transactions.
We would be pleased to consider a rulings application with respect to any proposed transaction involving this subject.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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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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