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:
1.Whether the Department has established guidelines to determine whether an agency relationship exists?
2.Whether the Department considers that there is an agency relationship for the purposes of the Act where there is an agency relationship under the common law or the Civil Code?
Position TAKEN:
1.No
2. Yes, except for unusual circumstances.
Reasons FOR POSITION TAKEN:
1.The question of whether an agency relatioship exists can be a complex matter that must be detremined under the common law or the civil law and accordingly the Department has not established guidelines.
2. Rules under common law or civil law usually apply for the purposes of the Act. See letter A-8158 for example of possible unusual circumstances. Impossible for the Department to visualize all possible transactions.
5-950698
XXXXXXXXXX Robert Gagnon
Attention: XXXXXXXXXX
April 4, 1995
Dear Sirs:
Re: Agency Arrangement
This is in reply to your letter of March 7, 1995 wherein you requested a technical interpretation concerning agency relationships.
The question of whether or not an agency relationship exists must be determined under the common law (or the Civil Code for the province of Quebec) and can be a complex matter. The Department has not established guidelines to determine whether an agency relationship exists.
Except for unusual circumstances, the Department recognizes that for the purposes of the Income Tax Act, all the transactions of an agent made on behalf of a principal are the transactions of the principal, where there is an agency relationship under the common or civil law and the agency relationship, the agent and the principal are disclosed to the Department.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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