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Vancouver Island Tax Services Office (613) 590-1116 2004-009001 Support Payments- Commencement Day This is in response to your enquiry of August 9, 2004, in which you request our comments in connection with the tax treatment of child support amounts received by a taxpayer, pursuant to paragraph 56(1)(b) of the Income Tax Act (the "Act"). ...

In concluding that there was sufficient inter-connection or integration with the business of production of silver that a gain from hedging activities could be considered to be income from that business, Mackay, J. commented in the case of Echo Bay Mines, 92 DTC 6437 (FCTD), that the gain from settlement of forward sales contracts could be considered as income from production only to the extent such contracts corresponded to the plaintiff's actual silver production. ...

Criteria for Exemption Applied to the Society We have examined the documents you provided with respect to the Society in connection with the criteria for exemption under paragraph 149(1)(l) and have the following comments: Charity The first criteria that must be satisfied is that the Society must not be, in the opinion of the Minister, a charity within the meaning assigned by subsection 149.1(1). ...

Loan origination costs The expenses A Co incurs in connection with the acquisition of the CSAs are referred to as loan origination costs (“LOCs”). ...

Justice Mackay stated: "I turn to the issue whether, if the activities of the plaintiff constituted hedging, there is sufficient inter-connection or integration with the business of production of silv? ...

Audit may wish consider whether an adjustment to the amount deductible by Canco is warranted in the event that one or more of Canco’s employees changed employers within the Parentco group during the grant-to-vest period resulting in the PSP awards not being fully attributable to services rendered in connection with Canco’s business. ...

Where the expense qualifies as CEE, we agree that a taxpayer has the choice of claiming such an expense as either CEE, we agree that a taxpayer has the choice of claiming such as expense as either CEE or a utility service connection expense under paragraph 20(1)(ee).  ...

Tax attributes and the “one of the main reasons” test The “one of the main reasons” test (hereafter referred to as the “Motive Test”) in subsection 94.1(1) reads: “and it may reasonably be concluded, having regard to all the circumstances, including (c) the nature, organization and operation of any non-resident entity and the form of, and the terms and conditions governing, the taxpayer's interest in, or connection with, any non-resident entity, (d) the extent to which any income, profits and gains that may reasonably be considered to be earned or accrued, whether directly or indirectly, for the benefit of any non-resident entity are subject to an income or profits tax that is significantly less than the income tax that would be applicable to such income, profits and gains if they were earned directly by the taxpayer, and (e) the extent to which the income, profits and gains of any non-resident entity for any fiscal period are distributed in that or the immediately following fiscal period, that one of the main reasons for the taxpayer acquiring, holding or having the interest in such property was to derive a benefit from portfolio investments in assets described in any of subparagraphs (b)(i) to (ix) in such a manner that the taxes, if any, on the income, profits and gains from such assets for any particular year are significantly less than the tax that would have been applicable under this Part if the income, profits and gains had been earned directly by the taxpayer…” The part of the midamble the follows paragraph 94.1(1)(e) embodies the core of the Motive Test. ...

FACTS a) XXXXXXXXXX (“Canco”) is a corporation resident in Canada for purposes of the Act; b) XXXXXXXXXX (“ForeignCo”) is a corporation resident in XXXXXXXXXX for purposes of the Act; c) Pursuant to a license agreement between Canco and ForeignCo (the “License Agreement”), ForeignCo licenses to Canco, in exchange for royalty payments (the “Royalties”), the non-exclusive rights to use certain XXXXXXXXXX in connection with the design, creation, manufacturing and sale of Canco products in countries of XXXXXXXXXX region; d) The License Agreement provides that XXXXXXXXXX% of the Royalties paid by Canco is attributable to the use of copyrights and XXXXXXXXXX% is attributable to the use of trademarks; e) The Royalties paid by Canco are deductible in computing its income, under Part I, from a business carried on by it; f) Canco does not have a permanent establishment outside of Canada; and, g) Canco and ForeignCo deal at arm’s length within the meaning of section 251. ...

(footnote 9) The Protocol amended Article XXX(3) in connection with entities entitled to any special tax benefits under the Barbados IBC Act or any substantially similar law. ...