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
Canadian Petroleum Tax Society Conference
June 2, 1994
Question No. 25
ACQUISITION OF CONTROL OF FOREIGN AFFILIATES - SUBSECTION 111(4)
Does subsection 111(4) apply to the capital property of a foreign affiliate if that foreign affiliate is acquired or the foreign affiliate's Canadian parent undergoes an acquisition of control?
Department's Position
Subsection 111(4) does not generally apply to the capital property of a foreign affiliate upon the acquisition of control of the affiliate or the Canadian parent of the affiliate. Although a foreign affiliate is not specifically excluded from the application of subsection 111(4), the reference in paragraphs 111(4)(d), (e) and (f) to "the taxation year that ended immediately before that time" is a reference to the taxation year deemed by paragraph 249(4)(a) to have ended immediately before the acquisition of control. Subsection 249(4) does not apply to the acquisition of control of a foreign affiliate unless the foreign affiliate carried on business in Canada at any time in its last taxation year commencing before the acquisition of control. The various rules in subsection 111(4) are all interdependent. Paragraph 111(4)(c) does not operate in isolation notwithstanding that the paragraph does not refer to "the taxation year that ended immediately before that time".
Author: Tim Kuss
File: 941107
Date: May 2, 1994
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