Search - connection

We agree that the provisions of the said Article XIIIC exempt from tax, otherwise imposed by subsection 212(5) of the Income Tax Act, payments made for the right in or to the use of a videotape for use in connection with television broadcasting. ... In this context, it is your view that the exemption should continue to apply if "a motion picture is first filmed and then transferred to video tape for editing and other production and post-production work, with the final version remaining on video tape for use in connection with television". ...

We are now, after further consideration, of the opinion that the income of a foreign affiliate should only be accepted, for the purposes of subparagraph 95(2)(a)(i), as pertaining or being incident to the active business of a related foreign affiliate in very rare and unusual circumstances where the taxpayer substantiates that there is a direct connection between the income of the foreign affiliate and the active business of the related foreign affiliate. Based on our review of the information that has been provided to us, we do not feel that the taxpayer has substantiated that there is a direct connection between the interest income of XXX and the active businesses of any of its related foreign affiliates and on that basis we are in agreement with you that subparagraph 95(2)(a)(i) is not applicable and that the interest income is foreign accrual property income. ...

It is our understanding that XXX In order for an individual to be eligible to claim the OETC, in addition to meeting other conditions set out in subsection 122.3(1) of the Income Tax Act (the “Act”), the individual is required to perform all or substantially all the duties of his employment outside Canada in connection with a contract under which the specified employer carried on business in such country or countries with respect to the qualified activities set out in paragraph 4(c) of Interpretation Bulletin IT-497R2. Based on the limited facts provided in your letters of October 25 and November 29, 1991 XXX In order for you to qualify for the OETC it would be necessary for XXX to demonstrate that they are carrying on business in Mexico in connection with a contract with respect to one or more of the qualified activities. ...

New paragraph 85(1)(c.2) of the Act as enacted by Bill C-18 applies where a taxpayer carrying on a farming business, the income from which is computed in accordance with the cash method, transfers to the corporation property, which was inventory owned in connection with that farming business immediately before the transfer of the property to the corporation. ... Pursuant to new subparagraph 85(1)(c.2), a growing crop of plants acquired on a subsection 85(1) rollover by a corporation in connection with a cash method farming business would be purchased inventory of the corporation for purposes of paragraph 28(1)(c) of the Act. ...

You further enquire as to whether an employee covered by an individual RPP could deduct any expenses paid by him in connection with establishing the RPP. ... In our opinion, an employee is not entitled to deduct expenses paid in connection with establishing an individual RPP since these expenses belong to the employer or the trustee of the RPP. ...

Question (d) Whether the position be different if the bonus or salary was paid to the beneficiary of the freeze in the ordinary course of the corporation's business or in connection with a post-freeze asset sale by the corporation. ... The payment by the corporation of a bonus or salary to the beneficiary of the freeze in connection with a post freeze asset sale by the corporation, and such a bonus or salary is not commensurate with the value of the services performed and the responsibilities assumed by the beneficiary of the freeze. ... (d) Would your position be different if the bonus or salary was paid to the beneficiary of the freeze in the ordinary course of the corporation's business or in connection with a post-freeze asset sale by the corporation? ...

.; (b) "Client" means the XXXXXXXXXX; (c) "Contract" means the XXXXXXXXXX-year lease contract for the Product as described in paragraph 3 below; (d) "Country 1" means XXXXXXXXXX; (e) "Country 2" means XXXXXXXXXX; (f) "CRA" means the Canada Revenue Agency; (g) "Overseas Employees" means the employees of Aco who will perform their employment duties in Country 1 in connection with the Contract; (h) "OETC" means the overseas employment tax credit in section 122.3 of the Act; (i) "Product" means the XXXXXXXXXX; (j) "Subcontractor" means XXXXXXXXXX; and (k) "Subcontractor Supervisor" means the employee of Aco who will carry out certain activities in Country 2 in connection with the Contract. ... In connection with its obligations under the Contract, Aco will send an XXXXXXXXXX ("Subcontractor Supervisor") to Country 2 for a continuous period of XXXXXXXXXX to supervise the Subcontractor. ... The activities described in 9(a) to 9(d) and 13(a) to 13(e) above will represent more than 50% of all activities that will be undertaken by Aco in Country 1 and Country 2 in connection with the Contract. 16. ...

Paragraph 122.3(1)(b) of the Act states that throughout the qualifying period all or substantially all of the duties of employment must be performed outside Canada and the work must be done in connection with a contract under which the employer carries on business outside Canada. ... The duties performed by an individual outside Canada during a qualifying period in connection with a qualifying activity of a specified employer (qualifying duties) are compared to all of the duties that the individual performed for that employer during the same period. ... When the aggregate of the employment duties performed outside Canada in connection with ineligible activities and those performed in Canada in connection with any activity represent more than 10% of all the employment duties, the individual will not meet the "all or substantially all" test. ...

It may not always be easy to decide whether an expense has so arisen but it seems to me that the words "in the course of" in section 11(1)(cb) are not a reference of time when the expenses are incurred but are used in the sense of "in connection with" or "incidental to" or "arising from" and refer to the process of carrying out or the things which must be undertaken to carry out the issuing or selling or borrowing for or in connection with which the expenses are incurred. ... When a corporation enters into a transaction that results in the issuance or sale of shares of its capital stock, the following expenses would be deductible, pursuant to 20(1)(e)(i) of the Act, in computing income for the year in which they are incurred: (a)legal fees in connection with the preparation and approval of a prospectus pertinent to the issuance or sale of shares, units, or interests; (b)accounting or auditing fees in connection with the preparation of reports on financial statements and statistical data for inclusion in, or presentation with the prospectus. ... This position is confirmed in paragraph 13 of IT-341R3 in which we state: "For expenses to qualify under paragraph 20(1)(e), in connection with the issuance or sale of shares, it is not necessary for the taxpayer to obtain additional capital by the issuance or sale of shares. ...

In the case where the interest paid is in connection with a permanent establishment that the Canadian bank has in Australia and such interest will be borne by that permanent establishment, the interest will be deemed to arise in Australia. ... In the case where the interest is in connection with a permanent establishment of the Canadian bank situated in a third state, the default is to source the interest to the state in which the payer is resident. ... Convention sources interest to a third state where the interest is in connection with a permanent establishment the payer has in that state and the interest is borne by that permanent establishment. ...