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 or not a Russian joint stock company ("JSC") would be considered to be a corporation for purposes of the Act (in particular the definition of foreign affiliate).
Position:
Yes, provided the JSC does not have a limited life and provided the JSC is not transformed into another entity.
Reasons:
A review of the legislation indicates that the JSC would be a separate legal entity in line with the comments in IT-343
962501
XXXXXXXXXX J. Stalker
Attention: XXXXXXXXXX
January 28, 1997
Dear Sirs:
Re: Russian Joint Stock Companies
We are writing in response to your letter dated July 16, 1996 in which you request our opinion as to the tax status in Canada of a "Joint Stock Company" ("JSC") as set up and/or governed under Russian Federal Law No. 208-FZ "On Joint Stock Companies", as signed by the President of the Russian Federation on December 26, 1995 (the "Russian JSC Legislation").
Based on our review of the Russian JSC Legislation, we are of the opinion that a JSC would be a corporation for purposes of the Income Tax Act (Canada) (the "Act") and in particular for the purpose of the definition of "foreign affiliate" in subsection 95(1) of the Act, as a JSC is a distinct legal entity, separate from its shareholders, directors and officers. However, this view would not necessarily extend to a JSC that has a limited life, or that is transformed into another entity, as provided for in the JSC Legislation.
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 22 of Information Circular 70-6R3, are not binding on the Department.
Yours truly
for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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