30 January 1996 External T.I. 9510385 - CARRYOVER OF MINIMUM TAX WHEN NON-RESIDENT

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:

Can minimum tax be carried over to offset Part I tax incurred when non-resident?

Position:

Yes, subject to 120.2(4).

Reasons:

Law. (and see 5-9375)

XXXXXXXXXX				951038

January 30, 1996

Dear Sir:

Re: Minimum Tax Carryover to Years of Non-Residency

We are writing in response to your letter dated February 27, 1995 in respect of the minimum tax carryover, as provided for in subsection 120.2(1) of the Income Tax Act (Canada) (the "Act").

In our view the additional taxes paid under the minimum tax provisions for previous taxation years when the taxpayer was a resident of Canada may be carried over as provided for in subsection 120.2(1) of the Act to a subsequent year when the taxpayer is a non-resident and incurs a Part I tax liability, provided that the exclusions in subsection 120.2(4) do not apply.

The above comments represent our general views with respect to the subject matter of your letter. These comments do not constitute an advance income tax ruling and therefore, as described in paragraph 21 of Information Circular 70-6R2, are not binding on the Department.

Yours truly,

for Director
Reorganizations and Foreign Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch