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.
942062
XXXXXXXXXX O. Laurikainen
(613) 957-2116
Attention: XXXXXXXXXX
December 14, 1994
Dear Sirs:
Re: Part XIII Tax - Computer Software Royalties
This is in reply to your letter dated August 11, 1994. You request clarification of the Department's position in regard to the Part XIII withholding taxes applicable to royalties paid by a resident of Canada to a non-resident of Canada in respect of a copyright in respect of the reproduction of computer software in Canada and the right to license such copies to Canadian end-users. Specifically, you inquire whether in the above circumstances, the Department would consider such payment to be for the right to license the software to end-users rather than a payment described in the exemptive provision subparagraph 212(1)(d)(vi) of the Income Tax Act (the "Act").
It would be necessary to review the details of an arrangement between the parties involved before a definitive determination could be made of the nature of a particular payment. However, where a payment made by a Canadian resident to a non-resident is determined to be made in respect of copyright in respect of the reproduction of computer software in Canada by the Canadian resident and the right to license to end-users the copies reproduced pursuant to that right, the entire amount of the payment will be considered to fall under the exemptive provisions of subparagraph 212(1)(d)(vi) of the Act. The Department considers the wording of subparagraph 212(1)(d)(vi) of the Act to be sufficiently broad such that it would apply to the full amount of the payment.
We trust this is the information you require.
Yours truly,
for Director
Reorganizations and Foreign Division
Rulings Directorate
Policy and Legislation Branch
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