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
Dear Sir:
RE: Stock Dividends
This is in reply to your letter dated July 13, 1993 wherein you inquired about the taxation of stock dividends received by an individual from a corporation not resident in Canada.
Dividends received by a taxpayer resident in Canada on a share owned by him of the capital stock of a corporation not resident in Canada are included in computing the income of such taxpayer in the year received pursuant to section 90 of the Income Tax Act (the "Act"). Pursuant to subsection 248(1) of the Act, a "dividend" for the purposes of the Act includes a stock dividend (other than a stock dividend that is paid to a corporation or to mutual fund trust by a non-resident corporation). The words in brackets in the above definition, do not apply to stock dividends paid by a non-resident corporation to individuals. Accordingly, the stock dividends received by you from XXXXXXXXXX are included in your income for income tax purposes pursuant to section 90 of the Act. Paragraph 20 of Interpretation Bulletin IT-88R2 entitled "Stock Dividends" and the note concerning Bill C-18 immediately following that paragraph generally support this interpretation.
We trust this is the information you require.
for DirectorReorganizations and Foreign 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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