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.
Principal Issues:
Meaning of "qualifying active business" in Reg. 5100(1)
Position TAKEN:
Routine
Reasons FOR POSITION TAKEN:
Routine
5-950416
XXXXXXXXXX G. Martineau
Attention: XXXXXXXXXX
March 31, 1995
Dear Sirs:
Re: Qualifying Active Business
This is in reply to your letter of February 7, 1995 in which you requested our opinion on the application of subsection 5100(1) of the Income Tax Regulations (the "Regulations") to a situation thereby described.
It appears that your enquiry relates to specific completed transactions. Whether a business is carried on by a corporation is a question of fact and in order to make such a determination, it is necessary to review all the facts surrounding a particular situation. Such a review is normally conducted by officials of a Tax Services Office. We offer, however, the following general comments.
In applying the test in paragraph 5100(1)(c) of the definition of "qualifying active business" to a corporation carrying on a business, we are of the view that its full time employees and the employees of all related corporations employed in Canada in respect of the business must be considered.
The above comments reflect an expression of opinion only and are not binding on the Department, as explained in paragraph 21 of Information Circular 70-6R2. We trust, however, that they are of assistance.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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