Search - considered

16 November 2000 External T.I. 1999-0009895 F- Revenu protégé- voiture de tourisme-- summary under Legal and other Professional Fees Summary Under Tax Topics- Income Tax Act- Section 18- Subsection 18(1)- Paragraph 18(1)(a)- Legal and other Professional Fees reorganization expenses are eligible capital expenditures (now Class 14.1) Before confirming that no adjustment to safe income on hand was required in respect of eligible capital expenditures such as reorganization expenses, CCRA stated: Where reorganization expenses have been incurred in connection with a reorganization whose purpose is to preserve the entity, structure or commercial organization of the business, or whose purpose is to allow the continued existence, growth and development of the business, the Agency's position is that the expenses in question could be considered to be capital expenditures incurred for the purpose of earning income from the business and therefore eligible capital expenditures. ...

., s. 84.1 is still considered to "apply" in that circumstance). ...

However, there was no liability under s. 116(5) to the Canadian corporation that had issued the options as it should not be considered to have acquired the options from the employee and, therefore, had no cost therefor. ...

After noting that a limited partnership with a sole general partner is generally considered to be controlled by that general partner, CRA indicated that C Ltd. thus controlled Opco, and that the “ultimate control” of Opco, as described in Parthenon, was held by A Ltd. ...

. … [If] the expenses [were] incurred voluntarily or with the intention of discharging a legal obligation made to restore a site or repair environmental damage that was caused directly by the company's operations … [then] those expenses would generally be considered a cost of doing business. ...

24 August 2000 External T.I. 2000-0011785 F- CRÉDIT D'IIMPOT FAVORISANT LE DÉVELOPEMENT-- summary under Paragraph 12(1)(x) Summary Under Tax Topics- Income Tax Act- Section 12- Subsection 12(1)- Paragraph 12(1)(x) Quebec tax credit not s. 12(1)(x) income until applied as an instalment or otherwise received CCRA indicated that the tax credit under the Quebec Taxation Act for promoting the development of information technologies would be considered to be included in the taxpayer's income under s. 12(1)(x) at the time the taxpayer became entitled to the credit (which required inter alia the submission of a copy of the certificate issued to the taxpayer by the Minister of Finance in respect of an eligible employee or qualified property) and it was applied as a payment of tax due by the corporation or at the time it was actually paid. ...

CCRA indicated that such policies could not be considered as part of a single group sickness or accident insurance plan because they were based in part on the corporation’s undistributed earnings, i.e., it was not based on the loss of employment earnings. ...

Depending on the circumstances of each situation, a taxpayer may be considered a de facto director and thus have the same responsibilities as a de jure director for the purposes of the application of section 227.1. ...

After noting that the corporation would be required to allocate the costs of the equipment between SR&ED and commercial activities, the Agency went on to indicate that labour, subcontracting, and materials expenses of a current nature relating to SR&ED activities that were "expenditures on or in respect of scientific research and exterior experimental development" as defined in s. 37(8)(a) to develop equipment that would be used 90% or more in the research laboratory and for equipment considered to be multi-purpose equipment, would qualify as current expenses for the purposes of s. 37 and for the calculation of the investment tax credit. ...

Before referring to the Oerlikon decision as to the meaning of “advance,” the Agency stated: [P]repaid expenses that are presented in the financial statements of one corporation and that are granted to another corporation (except a financial institution) are considered in computing the investment allowance under paragraph 181.2(4)(b) of the Act as a “loan or advance”. ...