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:
Whether an amount of income of a foreign affiliate which "shall not be included in computing the income" of a foreign affiliate of a taxpayer pursuant to paragraph 81(1)(c) of the Act can be considered to be "subject to tax under Part I of the Act" for the purposes of paragraph 5906(1)(b) of the Regulations to the Act.
Position:
No
Reasons:
Income which is not included in computing income under Part I is not "subject to tax under Part I".
952357
XXXXXXXXXX Olli Laurikainen
(613) 957-2116
Attention: XXXXXXXXXX
October 23, 1997
Dear Sirs:
Re: Foreign Affiliates Engaged in International Shipping
This is in response to your letter wherein you requested a technical interpretation in reference to paragraph 5906(1)(b) of the Regulations to the Income Tax Act (the "Act").
In our view, income derived by a foreign affiliate which is not included in its income by virtue of paragraph 81(1)(c) of the Act, is not "subject to tax under Part I of the Act" for the purposes of paragraph 5906(1)(b) of the Regulations to the Act.
We trust that this is the information you require.
Yours truly,
for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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