31 January 1996 External T.I. 9601695 - WAIVING OF FEES NON-PROFIT RULING

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 advance ruling fees may be waived when requested by a not-for-profit organization.

Position TAKEN:

No, the fees cannot be waived.

Reasons FOR POSITION TAKEN:

Like for-profit corporations, not-for-profit corporations benefit from rulings. In addition, the fee is based on time the spent providing the ruling and has no bearing on the amount of tax involved in a proposed transaction.

L. Barrows
XXXXXXXXXX		 960169

Attention: XXXXXXXXXX

January 31, 1996

Dear XXXXXXXXXX:

Re: Request for an Advance Ruling

This is in reply to your recent letter in which you requested that our fees associated with providing an advance ruling which may be requested by XXXXXXXXXX be waived due to the non-commercial nature of the proposed transaction. In addition, you requested advice as to the normal practice and procedures to follow when these types of entities require advance rulings.

An advance ruling is a written statement given by the Department to a taxpayer or entity stating how it will interpret specific provisions of existing Canadian income tax law in its application to a definite transaction or transactions being contemplated. The Income Tax Act contains numerous provisions pertaining to the organization and operation of not-for-profit and charitable organizations and, as a result, like commercial enterprises, advance rulings may also be required to provide assurance with respect to the income tax implications of transactions under consideration.

The provision of an advance ruling is an administrative service, the cost of which is borne by the requester who ultimately benefits from this service. The fee structure is set by Order-in-Council and is intended solely to recover the Department's costs. As a result, since the fee charged is based on the time spent by the Department in providing a ruling, we do not differentiate between taxable and non-taxable clients. Therefore, we are unable to waive the ruling fees as requested in your letter.

We have enclosed a copies of Information Circular 70-6R2, dated September 28, 1990, and the Special Release thereto, dated September 30, 1992, which provide standard information for making a request for an advance income tax ruling. Please also be advised that a written opinion on the interpretation of specific provisions of the Income Tax Act not relating to a specific proposed transactions may be obtained. There is no fee charged for an opinion, however, unlike an advance ruling, it is not binding on the Department.

We trust that this information will be of assistance.

Yours truly,

R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

Enclosures