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 an employer take a deduction under 147.2(2) with respect to employees of a predecessor employer?
Position:
Yes
Reasons:
XXXXXXXXXX
XXXXXXXXXX 963654
XXXXXXXXXX
Attention: XXXXXXXXXX
XXXXXXXXXX, 1996
Dear Sirs:
Re: XXXXXXXXXX
Advance Income Tax Ruling 962143, dated XXXXXXXXXX, 1996
This is in reply to your letter dated XXXXXXXXXX, wherein you advised us of certain amendments to the facts and proposed transactions described in the above-referenced Advance Income Tax Ruling (hereinafter referred to as the "Ruling Letter").
Any reference herein to paragraphs are references to those contained in the Ruling Letter and any defined terms used in this letter have the meanings assigned to them in the Ruling Letter.
The Ruling Letter is hereby amended as follows:
Paragraph 2 is deleted and replaced by:
"2.
XXXXXXXXXX
The following paragraph should be inserted immediately after paragraph 3:
"3A.
XXXXXXXXXX
The following is added to the end of paragraph 12:
XXXXXXXXXX
Paragraph 13 is deleted and replaced by:
"13.
XXXXXXXXXX
Ruling A is deleted and replaced by:
"A.The Proposed Contribution by each member of the XXXXXXXXXX will
(a)be an eligible contribution within the meaning of subsection 147.2(2) of the Act;
(b)be deductible by the member of the XXXXXXXXXX in computing its income pursuant to paragraph 20(1)(q) and subsection 147.2(1) of the Act."
Notwithstanding the above changes, we confirm that, subject to the conditions set out therein, ruling A above will be binding on the Department in accordance with the practice outlined in Information Circular 70-6R2, dated September 28, 1990, and the Special Release thereto dated September 30, 1992, provided that the proposed transactions described in paragraphs 8, 9, 10, 12 and 13 of the Ruling Letter are completed by XXXXXXXXXX and the proposed transaction described in paragraph 11 of the Ruling Letter is completed by XXXXXXXXXX in accordance with our letter dated XXXXXXXXXX, 1996 (#963534).
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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