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: Minor Amendments to Ruling
Reasons: Minor Amendments - ACO should be CCO and
CCO should be ACO in the ruling.
We are writing pursuant to our (XXXXXXXXXX) telephone conversation of earlier today with respect to our advance income tax ruling 993020 issued to yourself on behalf of the above-referenced corporations.
In accordance with our conversation, the following are amendments to the aforementioned advance income tax ruling:
Paragraph 3 of the FACTS is amended as follows:
XXXXXXXXXX ("CCO") is a "taxable Canadian corporation", within the meaning of that term in subsection 89(1) of the Act, and was formed by amalgamation on XXXXXXXXXX under the Canadian Business Corporations Act). CCO is an indirect wholly-owned subsidiary of ACO and is in the business of XXXXXXXXXX.
The business number of CCO is XXXXXXXXXX and it files its return of income with the XXXXXXXXXX Taxation Centre.
Paragraph 6 of the PROPOSED TRANSACTIONS is amended as follows:
ACO will use its available funds to make loans to CCO aggregating $XXXXXXXXXX, bearing interest at XXXXXXXXXX %. In order for ACO to have sufficient funds available, it may be necessary for one of ACO's subsidiaries to draw on their available bank lines to repay existing inter-company debts payable to ACO.
Ruling "A" contained in the aforementioned advance income tax ruling is amended to read as follows:
Interest on the funds borrowed by CCO from ACO and used by CCO to subscribe for the preferred shares of BCO, as described in paragraph 7 of the Proposed Transactions, that is paid or payable in respect of a period in a taxation year during which CCO owns those preferred shares will, pursuant to paragraph 20(1)(c) of the Act, be deductible by CCO in computing its income for tax purposes for that taxation year.
As noted in the original advance income tax ruling, this ruling is binding on the Agency provided that the proposed transactions are completed on or before XXXXXXXXXX.
Financial Industries Division
Income Tax Rulings and
Policy and Legislation Branch
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