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In response to this follow-up question, CRA confirmed that "if the Canadian parent earns a profit, then it would be considered to provide the services of its seconded employees in the course of its own business," and clarified that a mark-up over direct salaries will not result in FAPI if there is no profit element, i.e., the mark-up covers other costs such as employment benefits – and that whether more than that level of markup would result in an offsetting deduction in computing the FAPI of FA "depends on the proper determination of the related profit to be attributed to the activities of the relevant personnel. ...

Although by virtue of s. 55(5)(e)(iii), this presumption may be considered to deem the brothers to be related to the estate with respect to that acquisition, the brothers would still be deemed not to be related to each other and, therefore, would continue to be unrelated to the dividend recipient, Corporation A, in determining whether or not the "triggering" events described above for the purposes of paragraph 55(3)(a) are engaged. ...

Therefore, Pubco would be considered to be in the same position in relation to the control of Aco as if Pubco owned the Aco shares at that time. ...

In addition, other criteria such as the number of staff at the facility, their skills and the equipment available in order to provide nursing care to patients 24 hours a day are elements that may be considered to establish if a retirement residence is a nursing home. ...

CRA considered that a lump sum payment received from a major supplier for signing a 15-year “supplier loyalty agreement” would be includible in income when received under s. 56.4(2) on the grounds that the loyalty covenant was intended to restrict the way in which the taxpayer made its purchases (i.e., it was in respect of a “restrictive covenant”), and then went on to state: However, if the amount is not in respect of a restrictive covenant, the Payment appears to be an amount otherwise described in paragraph 12(1)(x)...as an inducement or as assistance. ...

Accordingly… the amount of a dividend does not arise until it is considered to be received, and is thus included in income. ...

Would the income arising from such sales be considered to be earned or realized before the safe-income determination time? ...

In finding that this amount is subject to Part IV tax, CRA stated (TaxInterpretations translation): [T]he amount designated in respect of the beneficiary (taxpayer) in accordance with subsection 104(19) should be considered to be deemed to be received as a dividend by the beneficiary of the trust at the end of the trust’s taxation year in which the trust received the dividend. ...

Before paraphrasing the requirements under s. 60(1)(j)(i) for such a deduction, CRA stated: a foreign plan will be considered to be a superannuation or pension plan where contributions are made to the plan by or on behalf of the employer or former employer of an employee in consideration for services rendered by the employee and the contributions are used to provide an annuity or other periodic payment on or after the employee’s retirement. ...

After concluding that a Canadian beneficiary’s interest is considered to be specified foreign property, and the individual is required to file T1135s reporting inter alia the “cost amount” of the individual’s interest in the fund, CRA stated: Provided the Super Fund described above is a pension and an employee benefit plan, the cost amount of the interest in the Super Fund will be the amount the individual has a right to receive in respect of the Super Fund. ...