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.
This is in reply to your letter of July 17, 1981 concerning interest paid by a Canadian partnership to a U.S. partnership.
Canadian investor will acquire an interest in Canadian partnership. The investors in consideration of the partnership interest make a payment of cash and issue a 30 month interest bearing note payable to the Canadian partnership. The Canadian partnership, in turn, acquiries a 70% interest in a U.S. partnership paying cash and a 30 month interst bearing note payable by the Canadian partnership. The U.S. aprtnership carries onthe business of acquiring land on which it will construct, develop and oeprate a shopping mall. All ofthe U.S. partnership's business will be carried on in the U.S. You have asked me to confirm your opinion that Part XIII withholding tax is not exigible on the interest paid by the Canadian partnership to the U.S. partnership.
We are not prepared to confirm your opinion. In our view, that tax status could only be determined by a review of all the facts and documents of the transactions and the operations of two partnerships and the investors. We would be prepared to consider this matter if presented in the form of a request for an advance income ruling. Whether a ruling could be granted would, of course, depend on the particular proposals.
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© Her Majesty the Queen in Right of Canada, 1981
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© Sa Majesté la Reine du Chef du Canada, 1981
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