Finance has issued a comfort letter respecting a deemed repayment rule for upstream loans

The upstream loan regime in s. 90 provides for income inclusions under s. 90(6) for certain indebtedness owing to foreign affiliates, and offsetting deductions on repayment under s. 90(14), and contain back-to-back loan provisions in s. 90(7). When the s. 15 shareholder loan rules were expanded to add s. 15(2.17) dealing with back-to-back loans, together with deemed repayment rules in ss. 15(2.18) and (2.19), no similar deemed repayment rule was added to s. 90.

Finance has issued a comfort letter recommending the introduction of repayment rules similar to those in ss. 15(2.18) and (2.19) effective for repayments after April 10, 2018.

Neal Armstrong. Summary of 16 May 2018 IFA Finance Roundtable, Q.10 under s. 90(14).