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.
We have reconsidered our position, at your request, that was stated in our memorandum of April 11, 1983 to you concerning whether the interest income of XXX pertains or is incident to the active business of a related foreign affiliate and is thereby deemed under the provisions of subparagraph 95(2)(a)(i) of the Act to be active business income.
We are now, after further consideration, of the opinion that the income of a foreign affiliate should only be accepted, for the purposes of subparagraph 95(2)(a)(i), as pertaining or being incident to the active business of a related foreign affiliate in very rare and unusual circumstances where the taxpayer substantiates that there is a direct connection between the income of the foreign affiliate and the active business of the related foreign affiliate. Based on our review of the information that has been provided to us, we do not feel that the taxpayer has substantiated that there is a direct connection between the interest income of XXX and the active businesses of any of its related foreign affiliates and on that basis we are in agreement with you that subparagraph 95(2)(a)(i) is not applicable and that the interest income is foreign accrual property income.
If there are any enquiries in respect to our comments in this memorandum, please contact David Burton at 996-9986.
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1983
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1983
Email this Content