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.
DRAFT
Revenue Canada Round Table
Tax Executives Institute, Inc.
1994 Annual Canadian Tax Conference
Question #14
LOSS ON NON-INTEREST BEARING LOAN TO FOREIGN CORPORATION
In view of the court decisions in National Development Ltd. (94 DTC 1061), Floyd R. Glass (92 DTC 1759) and Business Art Inc. (86 DTC 1842), has the Department expanded its administrative position as outlined in paragraph 6 of IT-239R2 to exclude foreign corporations from the application of subparagraph 40(2)(g)(ii) of the Act provided that all of the conditions outlined therein are met?
Department's Position
The Department has not appealed the decisions rendered by the court in each of the above cases and has accepted the decisions only in relation to the facts of each particular case. The Department's position regarding the deductibility of capital losses resulting from a loan bearing interest at less than a reasonable rate remains as stated in IT-239R2. Although the Department has no present intention of extending its current administrative position set out in paragraph 6 of IT-239R2, it will review its position in light of the above decisions.
Author:M. Sarazin
File:941027
Date:May 11, 1994
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