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In 2013 and 2015, Trust deducted income that it had designated to NR Beneficiary under subsection 104(6) (“Trust Income”) that it considered to be taxable dividend income to NR Beneficiary under subsections 104(13) and (19). ... If the reduced rate of withholding tax is denied by the CRA, and NR Beneficiary considered that denial to be contrary to the Treaty, he could submit a written request for assistance to the Competent Authority of Barbados presenting the grounds for a revision of the matter in accordance with the Mutual Agreement Procedure stated in Article XXVII of the Treaty. ...

Modified subsection 94.1(1) reads as follows (the modifications are in square brackets): 94.1 (1) If in a taxation year a taxpayer holds or has an interest in property (referred to in this section as an "offshore investment fund property") (a) that is a share of the capital stock of, an interest in, or a debt of, a non-resident entity (other than a controlled foreign affiliate of the taxpayer or a prescribed* non-resident entity) or an interest in or a right or option to acquire such a share, interest or debt, and (b) that may reasonably be considered to derive its value, directly or indirectly, primarily from portfolio investments of that or any other non-resident entity in […] and it may reasonably be concluded, having regard to all the circumstances, including […] (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 by the person resident in Canada in respect of whom the taxpayer is a foreign affiliate], 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 by the person resident in Canada in respect of whom the taxpayer is a foreign affiliate], there shall be included in computing the taxpayer's income for the year the amount, if any, by which (f) the total of all amounts each of which is the product obtained when (i) the designated cost to the taxpayer of the offshore investment fund property at the end of a month in the year is multiplied by (ii) 1/12 of the total of (A) the prescribed rate of interest for the period that includes that month, and (B) two per cent exceeds (g) the taxpayer's income for the year [(other than any income that would not be included in the taxpayer’s foreign accrual property income for the year if the value of C in the definition “foreign accrual property income” in subsection 95(1) were nil and other than a capital gain)] from the offshore investment fund property determined without reference to this subsection. ...

It is worth noting that Parliament has considered that more than one taxation year may be impacted by the determination of the partnership. ... Again there is an indication that Parliament has considered that more than one taxation year may be impacted by the determination of the partnership. ...

It is also our view that XXXXXXXXXX met the requirements for the deduction of the terminal loss under subsection 20(16) of the Act. (2) In light of the broad scope of the definition of "resource activity" in subsection 1206(1) of the Regulations, it is our view that notwithstanding the mining operations ceased in XXXXXXXXXX, the disposal of the machinery by XXXXXXXXXX would be considered as "activities that the taxpayer undertakes as a consequence of" the mine production/processing. ... The surrender of his licence, therefore, did not preclude the taxpayer from complying with the provisions of paragraph 18(1)(a) relating to an otherwise permissible deduction from income. 13.With respect to your reassessment alternative referred to in 9(a) above, we considered whether the Terminal Loss could be disallowed by virtue of subsection 20(16) of the Act, not paragraph 18(1)(a) of the Act, on the basis that the Machinery is not "depreciable property of a particular class" to XXXXXXXXXX. ... Accordingly, the Terminal Loss would not have to be deducted from XXXXXXXXXX resource profits under paragraph 1204(1)(f) of the Regulations. 19.In light of the broad scope of the definition of "resource activity" in subsection 1206(1) of the Regulations as referred to in 17 above, it is our view that notwithstanding the mining operations ceased in XXXXXXXXXX, the disposal of the Machinery by XXXXXXXXXX would be considered as "activities that the taxpayer undertakes as a consequence of" the mine production/processing. ...

To the extent that the trust provides for capital encroachment, will distributions in the 5-year period be considered capital such that any distribution is excluded from the beneficiary's income? ... When a beneficiary is both an income beneficiary and a capital beneficiary, distributions by the trust (other than proceeds of disposition of a beneficiary's interest in the trust) will generally be considered to be a distribution of income and included in income under 104(13) to the extent of the trust's income for that year unless the amount is established to be a distribution of capital from a personal trust. ... Under paragraph 104(13)(c), a distribution from a non-resident trust to a Canadian resident beneficiary in the same taxation year in which the trust earns income will generally be included in the beneficiary's income regardless of the source to the trust of the funds so distributed, unless the distribution can be considered to be a distribution of capital by a personal trust or proceeds of disposition of the beneficiary's interest in the trust. ...

Background 24(1) Paragraph 66.1(6)(a) of the Act provides that CEE of a taxpayer means any expense incurred after May 6, 1974 that is (iii)      any expense incurred by him (other than an expense incurred in drilling or completing an oil or gas well or in building a temporary access road to, or preparing a site in respect of, any such well) for the purpose of determining the existence, location, extent or quality of a mineral resource in Canada including any expense incurred in the course of (A)       prospecting, (B)       carrying out geological, geophysical or geochemical surveys, (C)       drilling by rotary, diamond, percussion or other methods, or (D)       trenching, digging test pits and preliminary sampling, but not including (E)       any Canadian development expense, or (F)       any expense that may reasonably be considered to be related to a mine that has come into production in reasonable commercial quantities or to be related to a potential or actual extension thereof, (iii.1)   any expense incurred by him after November 16, 1978 for the purpose of bringing a new mine in a mineral resource in Canada into production in reasonable commercial quantities and incurred before the coming into production of the new mine, including (A)  clearing, removing overburden and stripping, and (B)  sinking a mine shaft, constructing an adit or other underground entry. ... Where all of the relevant facts pertaining to a particular situation establish that the feasibility study cannot qualify for treatment as CEE, the costs thereof would be accorded the appropriate treatment described at paragraphs 4 and 5 of Interpretation Bulletin IT-475 and question 28 of the 1986 Revenue Canada Round Table:      Normally, a feasibility study undertaken to determine whether or not a particular course of action is desirable in connection with an existing business is considered to be a current expenditure.  ... Ct.), the court considered the meaning of "development expense" and considered four phases of mining, viz, prospecting, exploration, development and production. 9.         ...

It is clear to us that subparagraph 88(1.1)(e)(i) refers to the particular business of the subsidiary and not to businesses of the parent that are the same general nature and type of business of the subsidiary, i.e., similar businesses It is worthy to note that the definition of "business" is not an issue. 24(1) Note also that the nature and type of business is but one of many factors that would be considered in determining whether there is a single business or separate business.  ... Only the continuity of the appellant's business questioned here and later on at the same place, he stated that: In these respects particularly, the facts of the instant appeal are distinguishable from those of the cases cited by the respondent in which the businesses carried on by the taxpayer had clearly ceased to be operated or had so been altered in the loss application years that they could not be considered as being the business carried on by the taxpayer during the loss years The interpretation of subparagraph 88(1.1)(e)(i) which  24(1)  is seeking is one pertaining to circumstances in which the loss business has been discontinued.  ... The court considered the principle laid down in Eastern Textile Products Ltd. v. ...

Having determined the Canadian tax law as it applies to this situation, we then considered your question as to whether we believe this domestic rule is in contravention of Article VII of the Treaty. ... When paragraph 2 is considered in the context of the Branch tax scheme under the Canadian Act, it also seems reasonable from a conceptual standpoint, to be able to designate home office assets where branch assets are insufficient to fill CIF. ... We have considered the US Court decisions in National Westminster Bank, PLC v. ...

Out of the amount of the AMT of $487, $66 (i.e. $487 x $25,000/$185,000) is reasonably considered to be attributable to U.S. source income which has been resourced to Canada. ... In such a case it could not be argued that regular U.S. tax on U.S. source income resourced to Canada should not be considered a voluntary tax because of the AMT. ... By allowing the MTC claim to be considered to come out of the portion of the AMT attributable to Canadian source income first, the Cdn. ...

Out of the amount of the AMT of $487, $66 (i.e. $487 x $25,000/$185,000) is reasonably considered to be attributable to U.S. source income which has been resourced to Canada. ... In such a case it could not be argued that regular U.S. tax on U.S. source income resourced to Canada should not be considered a voluntary tax because of the AMT. ... By allowing the MTC claim to be considered to come out of the portion of the AMT attributable to Canadian source income first, the Cdn. ...