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Any amount payable under the provincial climate change legislation that is described as a fine or penalty as a consequence of the non-compliance will be precluded from deduction by section 67.6. 1.20 If a fine or penalty is incurred in connection with the acquisition of an asset for which capital cost allowance (CCA) may be claimed, the fine or penalty may be included in the capital cost of that asset (or the CCA class to which the asset belongs). If a fine or penalty is incurred in connection with the acquisition or production of inventory, the fine or penalty is included in the cost of inventory. 1.21 If a fine or penalty is incurred in connection with the acquisition of an eligible capital property, the fine or penalty is an eligible capital expenditure provided all the other tests in the subsection 14(5) definition of eligible capital expenditure are met. 1.27 Section 67.6 prohibits the deduction of a fine or penalty imposed under a foreign statute.... 1.29 Fines or penalties levied as a result of a criminal conviction may be precluded from deduction by section 67.6…. ...

October 1989 Revenue Canada Round Table- Q.26 (Jan. 90 Access Letter, ¶1075)-- summary under Subsection 402(5) Summary Under Tax Topics- Income Tax Regulations- Regulation 402- Subsection 402(5) The words "used in connection with the principal business operations of the corporation" relate solely to the words "rentals or royalties from property". Therefore, if a corporation is formed for the sole purpose of holding long-term investments, thereby receiving dividends and interests, it receives those returns on property that is used in connection with this principal business. ...

26 February 2015 CBA Roundtable, Q. 17-- summary under Subsection 186(1) Summary Under Tax Topics- Excise Tax Act- Section 186- Subsection 186(1) costs incurred respecting capital raises to fund an operating subsidiary are not creditable Memorandum 8.6, para. 11, Example 3, indicates that “HoldCo” may not claim input tax credits (ITCs) under s. 186(1) for legal and accounting costs incurred in connection with raising money through issuing shares, even where the issuance proceeds are used to purchase additional shares in “OpCo,” all of whose property is acquired for consumption, use or supply in widget manufacturing- on the basis that the services are acquired for consumption or use in relation to the first order supply (the share issuance) and not in relation to the shares of OpCo. However, in Stantec the Tax Court found that the s. 186(1) language implied a wide, rather than narrow, connection between the property and services acquired and the shares of the Opco, and rejected the above-noted example (published at that time in P-196R), stating: I see no support for this one step removed doctrine. ... In light of the Tax Court’s explicit rejection of the “one step removed doctrine,” does CRA intend to revise Example 3 to permit a Holdco to claim ITCs for costs incurred in connection with a share issuance of its own shares that relates directly to a purchase of additional shares in an Opco? ...

The active business carried on by USco in the United States is substantial in relation to the active business carried on by Canco. 1) Canco distributes a portion of its after-tax income from its active business to USco in the form of dividends on its shares Since USco and Canco carry on parallel business activities and the dividends are paid out of the after-tax earnings from Canco's business, we would consider the dividends received by USco to be derived in connection with USco's active business. 2) USco sells the shares of Canco and realizes a taxable capital gain Since the value of the Canco shares (and thus the taxable capital gain) is derived from an active business in Canada that is parallel to the active business carried on by USco in the United States, we would consider the taxable capital gain on the disposition of the shares of Canco to be derived in connection with USco's active business. ...

In finding that s. 175 would generally not so apply, CRA stated: For purposes of section 175, in order for the consumption or use of the property or service by the employee to be considered to relate to the activities of the employer, there must be a direct connection between the consumption or use of the property or service and the activities engaged in by the employer. [S]ince a medical or dental service is acquired by an employee in relation to his or her personal health and well-being, there would not be a direct connection between the service and the activities of the employer. ...

Under the terms of the Nominee Agreement, it agreed to deal with the Property only on the directions of the Owner and to execute and deliver all agreements, leases, covenants, instruments and assurances required by Owner from time to time in connection with the Property. In connection with the Owner’s development of the Property, the Nominee has contracted on behalf of the Owner for the supply of goods and services from third parties, with the resulting contracts and invoices being in the name of the Nominee. ...

Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024-- summary under Subsection 402(5) Summary Under Tax Topics- Income Tax Regulations- Regulation 402- Subsection 402(5) CRA broad interpretation of Reg. 402(5) exclusion 2.23 Subsection 402(5) of the Regulations provides that for purposes of subsection 402(3), gross revenue of a corporation does not include interest on bonds, debentures or mortgages, dividends on shares of capital stock, or rentals or royalties from property that is not used in connection with the principal business operations. 2.24 In Provincial Income Allocation Newsletter No. 1 the CRA confirmed that a broad interpretation of the excluded amounts is appropriate for the purposes of Part IV of the Regulations. Under such a broad interpretation, interest on promissory and other notes, bankers’ acceptances, intercompany loans, certificates, guaranteed investment certificates, and any unsecured debt instruments or other similar obligations would also be excluded from the gross revenue of a corporation. 2.25 In addition, the reference in subsection 402(5) to “that is not used in connection with the principal business operations of the corporation” refers only to “rentals or royalties from property” and not to the other items enumerated in that subsection. ...

GST/HST Memorandum 4.5.3 “Exports – Services and Intellectual Property” June 1998-- summary under Paragraph 7(d) Summary Under Tax Topics- Excise Tax Act- Schedules- Schedule VI- Part V- Section 7- Paragraph 7(d) Principles re "in respect of" exclusion Determining connection between service and property 46. The following guidelines help in determining whether the connection between the service and the real or tangible personal property is sufficient for the service to be "in respect of" the property for purposes of paragraphs 7(d) and (e) and paragraphs 23(b) and (c) of Part V of Schedule VI. purpose or objective (a) Was the service designed, developed or undertaken to fulfil or serve a particular need or requirement arising from or relating to the property? ... If some object comes between the service and the property, the connection becomes more remote. ...

P-169R Meaning of in Respect of Real Property Situated in Canada and in Respect of Tangible Personal Property that is Situated in Canada at Time the Service is Performed, for Purposes of Schedule VI, Part V, Sections 7 and 23 to the Excise Tax Act-- summary under Section 23 Summary Under Tax Topics- Excise Tax Act- Schedules- Schedule VI- Part V- Section 23 "In respect of" criteria The following guidelines will be applied by the Department to aid in the determination of whether the connection between the service and the real or tangible personal property is sufficiently direct for the service to be "in respect of" the property for purposes of Schedule VI, Part V, sections 7 and 23: a) Was the service designed, developed or undertaken to fulfil or serve a particular need or requirement arising from or relating to the property? ... If some object comes between the service and the property, the connection becomes increasingly remote. ...

In such a case, there is no need to re-document the account holder as long as: the appropriate due diligence requirements have been carried out, or are in the process of being carried out, for the original account; the opening of the new account does not require the provision of new, additional or amended client information; with respect to an account subject to AML/KYC Procedures, the financial institution is permitted to satisfy those procedures for the new account by relying on the procedures performed in connection with the original account; and when a threshold has been applied in connection with the preexisting individual account, the financial institution’s computerized systems are able to link the new account to the original account held by the account holder and allow the account balances or values to be aggregated. ...