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: Application of subsection 248(28)
Position: See below
Reasons: See below
TEI Conference
December, 2000
Question 24
Subsection 248(28) - Double Taxation
Would the Agency provide guidance in respect of the interpretation and application of subsection 248(28)? For example, would subsection 248(28) provide relief where section 17 requires an inclusion in income of amounts in respect of two or more loans in the circumstances described in Question XXVIII at the 1999 liaison meeting?
Agency's Position
Subsection 248(28) provides that, unless a contrary intention is evident, no provision should be interpreted to require an amount to be included or deducted more than once in computing a taxpayer's income. Generally speaking, subsection 248(28) is aimed at providing relief in situations where two provisions of the Act apply to require an inclusion in income or permit a deduction from income of the same amount.
We are of the view that subsection 248(28) does not affect the application of section 17 in the circumstances described in Question XXVIII since section 17 does not require a particular amount to be included in income more than once. That is, section 17 requires only one income inclusion in respect of any particular amount owing. For example, a Canadian resident corporation could be required to include an amount in income in respect of an amount owed to it by a non-resident person ("first amount") and also be required to include an amount in income in respect of an amount deemed to be owed to it pursuant to subsection 17(2) ("second amount"). In this scenario, each income inclusion relates to a separate amount owing wherein the first amount arose in the circumstances described in subsection 17(1) and the second amount arose in the circumstances described in subsection 17(2).
Note:
Question XXVIII of the 1999 at liaison meeting dealt, in part, with the situation where a Canadian resident corporation loans money to a foreign affiliate which, in turn, loans money to non-affiliated, non-resident corporations. In these circumstances, there may be an actual amount and a deemed amount owing to the Canadian resident corporation for the purposes of computing an income inclusion under subsection 17(1).
Author: Daryl Boychuk
File: 2000-005649
Date: November 21, 2000
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