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:
The Province of Saskatchewan issues information slips to individuals who invested in a share of the capital stock of a prescribed labour-sponsored venture capital corporation. Is this the correct way to issue these slips?
Position:
None.
Reasons:
There is no provision in the Act regarding the issuance of provincial slips.
October 3, 1997
Regina Tax Services Office Headquarters
Client Services Division Sylvie Labarre
(613) 957-8953
Attention: Terry O'Hara
7-971892
Labour-Sponsored Funds Tax Credit
This is in reply to your memorandum dated July 10, 1997 concerning the information slips issued by the Province of Saskatchewan when reporting investments in a labour-sponsored venture capital corporation.
For the purposes of the definition "approved share" in subsection 127.4(1) of the Income Tax Act (the "Act"), "prescribed labour-sponsored venture capital corporation" includes, inter alia, a corporation that is registered under the provisions of The Labour-sponsored Venture Capital Corporations Act, Statutes of Saskatchewan 1986, c. L-0.2 or a "registered labour-sponsored venture capital corporation".
The Act contains provisions regarding the information returns to be issued by a "registered labour-sponsored venture capital corporation". A "registered labour-sponsored venture capital corporation" means a corporation that was registered under subsection 204.81(1), the registration of which has not been revoked. Pursuant to paragraph 204.81(6)(c) of the Act, the Minister may revoke the registration of a corporation where the corporation fails to issue to an individual before April of the following calendar year an information return in prescribed form (T5006) stating the amount of the consideration paid for the Class A share of the capital stock of the corporation the individual acquired or irrevocably subscribed and paid in the period beginning on the 61st day of a calendar year and ending on the 60th day of the following calendar year.
There is no provision in the Act concerning the issuance of an information return by a "prescribed labour-sponsored venture capital corporation" that is not a "registered labour-sponsored venture capital corporation" (for example, a corporation that is registered under the provisions of The Labour-sponsored Venture Capital Corporations Act, Statutes of Saskatchewan 1986, c. L-0.2). To claim a labour-sponsored funds tax credit in that case, an individual has to file an official provincial slip. There is no requirement in the Act concerning the information to be stated on a provincial slip. However, an individual should be able to prove that he was entitled to the amount claimed as a labour-sponsored funds tax credit under subsection 127.4(2) of the Act. In our view, it would appear that the provincial slip issued by the Province of Saskatchewan provides the necessary information to determine the amount that an individual may deduct in a taxation year under subsection 127.4(2) of the Act.
We trust that our comments will be of assistance to you.
Marc Vanasse, CA
Manager
Resources, Partnerships and
Trusts Section
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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