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:
Whether paragraph 149(1)(d) would apply to a corporation owned by more than one municipality?
Position TAKEN:
Yes
Reasons FOR POSITION TAKEN:
F9130021 et F9130023
5-950988
XXXXXXXXXX Adèle St-Amour
Attention: XXXXXXXXXX
June 21, 1995
Dear Sirs:
Subject: Exempt Status - Paragraph 149(1)(d) of the Income Tax Act ("the Act") - Multiple Municipalities
This is in response to your letter of February 24, 1995, asking whether paragraph 149(1)(d) of the Act would apply to a particular corporation if all of its issued and outstanding shares are owned by more than one municipality. We apologize for the delay in responding to your letter.
Paragraph 149(1)(d) of the Act exempts from tax any corporation, commission or association that is owned to the extent of at least 90% by the federal or provincial government or a Canadian municipality. It also provides for the exemption from income tax of any corporation which is a wholly-owned subsidiary of such a corporation, commission or association. Paragraph 5 of Interpretation Bulletin IT-347R2 refers to an ownership test which could include a combination of qualifying entities. We are of the view that this interpretation may apply to one or more municipalities.
As explained in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, the above comments do not constitute an advance income tax ruling and are not binding on the Department. We trust the above comments will be of assistance to you. If you have any questions do not hesitate to contact us.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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