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.
XXX
This is in reply to your letter of June 18 concerning Article XIIIC of the Canada-U.S. Income Tax Convention (1942).
We agree that the provisions of Article XIIIC exempt from tax, otherwise imposed by subsection 212(5) of the Income Tax Act, payments made for the right in or to the use of a videotape for use in connection with television broadcasting. This exemption does not, however, apply to videotapes of motion picture films.
You have asked us to confirm that Revenue Canada has agreed to vacate any reassessments made against Canadian resident taxpayers for their failure to withhold royalty payments in respect of such videotape rentals. In our view, the penalty and interest liability provisions of subsection 227(8) would not have application in circumstances where an amount was not required to have been withheld pursuant to subsection 212(5) of the Act. Where the penalty provisions of subsection 227(8) have been applied, in such a case, full particulars should be provided to the local district taxation office for their consideration.
We hope the foregoing adequately answers your enquiry.
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© Her Majesty the Queen in Right of Canada, 1985
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© Sa Majesté la Reine du Chef du Canada, 1985
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