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:
Art 13 Canada-Japan Treaty - Where a gain arises
Position:
Question of fact but in the case of shares it is usually where the contract is signed and not the situs of the underlying assets.
Reasons:
Issue previously examined in the context of the Australian and New Zealand treaties
951036
XXXXXXXXXX David R. Senécal
September 13, 1995
Dear Sirs:
Re: Article 13 of the Canada-Japan Income Tax Convention
This is in reply to your letter of February 27, 1995, wherein you request our views as to where a gain from the alienation of any property dealt with in paragraph 4 of Article 13 of the Canada-Japan Income Tax Convention (the "Convention") is considered to "arise". We apologize for the delay in responding. The other issues referred to in your letter will be addressed in further correspondence.
In our view, it is always a question of fact as to where a gain would be considered to "arise" within the meaning of paragraph 4 of Article 13 of the Convention. However, having said this, where the property alienated consists of shares, we would generally not look to the situs of the underlying assets of the corporation, rather we would look to the location of the sale of the shares.
While the criteria outlined in paragraph 4 of Interpretation Bulletin IT-395R would be considered in establishing where the sale of a stock or bond is made, we feel that one of the principal factors to consider, in the case of all capital property other than real property, would be where the contract was made between the parties to the sale.
We trust that the above comments will be of assistance to you.
Yours truly,
for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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