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.
May 2, 1995
Specialized Compliance Manufacturing
Enhancement Division Industries,
J. P. Lavigne, DirectorPartnerships and
Trusts Division
Attn: Murray Lawton F.B. Fontaine
Tax Incentive Section
7-951192
Government Assistance
This is in reply to your facsimile transmission dated May 1, 1995 asking whether we have a list of types of programs dealing with government grants or subsidies, or a stated policy or directive or guideline as to what constitutes government assistance.
The closest thing that we are aware of is the Special Release to Interpretation Bulletin, IT-273R dated December 31, 1981. The Release contains references to various Bulletins that deal with specific government assistance programs. However, as indicated in the Special Release, the Department ceased the practice of dealing with government assistance programs in interpretation bulletins.
IT-273R provides certain guidelines concerning the tax treatment of government and other forms of assistance received by a taxpayer. However, this Bulletin was issued prior to the enactment of paragraph 12(1)(x) of the Income Tax Act (the "Act") which, subject to grandfathering, came into force after May 22, 1985.
Because of the various terms under which government assistance is provided, it would not be possible to establish a stated policy that would apply to each particular situation. Accordingly, the tax treatment of government grants or other forms of assistance received by a taxpayer after May 22, 1985 would be dealt with on a case-by-case basis in accordance with the provision of paragraph 12(1)(x) of the Act. This provision is very broad and may apply in many different scenarios based on the interpretation given in accordance with the facts of the particular case.
We hope that the above comments will be helpful to you. Should you require any further assistance, do not hesitate to contact us.
for Director
Manufacturing Industries, Partnerships
and Trusts Division
Income Tax Rulings
and Interpretations Directorate
Policy and Legislation Branch
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