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 our position on interest deductibility on shareholder loan substituted for a bank loan originally used for purpose of redeeming shares or reducing PUC applies to public corporation debtor also.
Position:
Yes
Reasons:
Rationale for position not dependent on private corporation status of debtor.
XXXXXXXXXX 973056
Attention: XXXXXXXXXX
December 8, 1997
Dear Sirs:
Re: Interest on Funds Borrowed
This is in reply to your facsimile transmission of November 18, 1997, and further to your telephone conversations with Claude Tremblay of this office. As discussed in the telephone conversations you ask us to confirm that the position described in our response to Question 5 of the June 14, 1996 Corporate Management Tax Conference (our document number E9620740) would extend to a public corporation.
This will serve to confirm that the position as set out in Question 5 and the response thereto would apply equally to a public corporation. We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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