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.
File # 980118
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Herb Dhaliwal, Minister of National Revenue, has asked me to reply to your letter to the Minister of Finance dated September 18, 1998, a copy of which was sent to Mr. Dhaliwal.
We share your concern regarding the proper tax treatment of amounts received by foreign governments under production sharing contracts with Canadian oil and gas companies.
We have, over the course of several months, worked with our colleagues at the Department of Finance to devise the form of an amendment to the Income Tax Act that would ensure that such amounts received by the foreign government are treated appropriately for Canadian tax purposes.
This form of a possible amendment together with one prepared by the industry was the subject of discussion by representatives of the two Departments and representatives of the oil and gas industry, including your company, at a meeting held on January 11, 1999. I understand that the discussions were productive and raised all parties' appreciation of the complexities and importance of the issue.
I also understand that officials of the Department of Finance will advise you shortly of the manner in which your concerns will be addressed. We will, of course, continue to work with our colleagues in that Department to resolve this matter.
Yours sincerely,
Bill McCloskey
Assistant Deputy Minister
Policy and Legislation Branch
M.Hiltz/nm
957-2113
January 14, 1999
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