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 a qualified subchapter S subsidiary ("QSSS") is a resident of the U.S. for the purpose of paragraph 1 of Article IV of the Canada-United States Income Tax Convention
Position: Yes
Reasons: Based on the provisions of the Internal Revenue Code regarding QSSS, there is no reason to say that it is not when our position on the residence status of an S corporation remains unchanged
xxxxxxxxxx 981635
S. Leung
Attention: xxxxxxxxxx
September 2, 1999
Dear Sirs:
Re: Residency Status of a Qualified Subchapter S Subsidiary of the United States
for the Purposes of the Canada-United States Income Tax Convention
We are writing in response to your inquiry as to whether a qualified subchapter S subsidiary ("QSSS") of a S corporation of the United States (the "U.S.") is considered to be resident in the U.S. for purposes of paragraph 1 of Article IV of the Canada-United States Income Tax Convention (the "Convention"). We acknowledge the information you provided relating to the relevant provisions of the Internal Revenue Code regarding QSSS and the House Committee Report related thereto.
In our opinion, as long as our position regarding a S corporation being a person resident in the U.S. for the purpose of paragraph 1 of Article IV of the Convention remains unchanged, a QSSS would be considered a person resident in the U.S. for the same purpose.
The above comments represent our general views with respect to the subject matter of your letter. These comments do not constitute an advance income tax ruling and therefore, as described in paragraph 22 of Information Circular 70-6R3, are not binding on the Department.
Yours truly,
for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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