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:
Are foreign banks (i.e., banks not listed in Schedule I or Schedule II of the Bank Act) "banks" for the purpose of subsection 248(1) of the Act?
Position:
No.
Reasons:
Based on the wording of the Bank Act and the Interpretation Act.
XXXXXXXXXX 962883
Attention: XXXXXXXXXX
November 20, 1996
Dear Sirs:
Re: Definition of Specified Financial Institution
This is in reply to your letter dated August 28, 1996, wherein you requested our views on the definition of specified financial institution ("SFI") in paragraph 248(1)(a) of the Income Tax Act ("Act"). Your question relates to a situation where a corporation may be described as a "bank" under the domestic laws of a country other than Canada, but is not a bank listed in Schedule I or Schedule II of the Bank Act. You ask whether for the purpose of paragraph 248(1)(a) of the SFI definition the reference to "bank" will include such a corporation.
It is our view that such a corporation would not be a bank for the purpose of paragraph 248(1)(a) of the SFI definition. However, one would also have to consider, based on the facts of a particular situation, whether one of the other paragraphs of the SFI definition would be applicable to the particular corporation. For example, assuming that the corporation is not otherwise related to, or controlled by, another SFI, it is possible that the business of such a corporation would be described in paragraph 248(1)(e) of the SFI definition. Of course, the actual determination of this matter remains a question of fact that would have to be decided on a case by case basis.
While we trust the foregoing comments are useful they are given in accordance with the practice referred to in paragraph 21 of the IC 70-6R2 and are not binding upon the Department.
Yours truly,
F. Lee Workman
Section Chief
Financial Institutions Section
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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