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.
5-961953
XXXXXXXXXX J. Teixeira
(613) 957-2095
Attention: XXXXXXXXXX
June 7, 1996
Dear Sirs:
This is in reply to your letter of May 29, 1996 requesting an advance ruling on how Revenue Canada (the "Department") would treat a large one-time cash payment for tax purposes paid to a manufacturer of farm equipment by a finance company.
Advance rulings are not issued on transactions that are already completed or on series of transactions that are significantly advanced. The situation outlined in your letter relates to an actual situation that has been completed; therefore, the enquiry should be directed to the local tax services office where the taxpayer files its returns. While we are unable to comment on the particular situation described in your letter, the following general comments may be of assistance to you.
The determination of whether the payment from the finance company is a loan to the manufacturer secured by the assignment of accounts receivable, as opposed to a sale of the accounts receivable by the manufacturer, will be, in part, a question of fact in each case. In order for the Department to make such a determination, all the agreements and arrangements relating to the transaction must be examined. The purpose of the arrangement and the relationship between the manufacturer and the finance company (whether arm's length) will also be important in making this determination.
The foregoing comments are not rulings and, in accordance with the practice referred to in Information Circular 70-6R2 dated September 28, 1990, are not binding on Revenue Canada.
Yours truly,
for Director
Reorganization and International Division
Income Tax Rulings and Interpretations
Directorate
Policy and Legislation Branch
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, 1996
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, 1996
Email this Content