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24 October 2012- 10:31am CRA characterizes referral fees as royalties rather than business profits Email this Content CRA considers that customer referral fees paid by a Canadian insurance broker to a US insurance broker likely should be characterized as payments for "information concerning... commercial... experience," so that the withholding tax that otherwise would apply under s. 212(1)(d)(ii) will be relieved by the Royalties Article of the Canada-US Income Tax Convention. ...

Tax Convention.  This reasoning probably applies to other penalties that are not imposed under the Internal Revenue Code. ...

29 May 2016- 12:01am CRA continues to not accept the deduction of notional expenses from the profits of PEs of (non-U.S.) non-residents Email this Content Notwithstanding a somewhat revised OECD approach, CRA continues to consider (in light of Cudd Pressure and s. 4(b) of the Income Tax Conventions Interpretations Act) that notional expenses are not deductible in computing the profits attributable to a Canadian permanent establishment for Treaty purposes – with the exception of PEs of qualifying U.S. residents, as to which there is an overriding agreement with the U.S. competent authority. ...

Summary of  OECD Discussion Draft, Working Party 1 "OECD Model Tax Convention: Tax Treatment of Termination Payments" under Treaties – Art. 15. ...

CRA accepted that Canco's payments to Pubco would be exempted from withholding tax by the Canada-US Income Tax Convention by virtue of being patent/know-how licence payments, other than payments for know-how provided under a "franchise" (a broad term- see Investors Group.) ...

Convention on its share of Canadian branch profits of a U.S. partnership that has elected to be a domestic corporation for Code purposes, if those profits qualify as connected to a substantial U.S. active business under Art. ...

GILTI Tax Treaties- Income Tax Conventions- Article 29 Treaty does not fetter the right of the US to impose GILTI tax with reference to Canadian subs’ income Treaties- Income Tax Conventions- Article 26 Cdn competent authority will not recognize claims that GILTI tax is contrary to Art. ...

Lin, [2018] NZCA 38 under Treaties – Income Tax Conventions – Art. 24 and of Brian J. Arnold, “The Relationship between Controlled Foreign Corporation Rules and Tax Sparing Provisions in Tax Treaties: A New Zealand Case,” Bulletin for International Taxation July 2018, p. 430 under Treaties – Income Tax Conventions – Art. 24. ...

Bundle Date Translated severed letter Summaries under Summary descriptor 2006-09-08 1 November 1994 Internal T.I. 94234170 F- CBR Assurance-vie Income Tax Act- Section 148- Subsection 148(9)- Disposition amendment to policy to reduce premiums and insured amounts was not intended to create a new policy, and was not a disposition Income Tax Act- Section 248- Subsection 248(1)- Disposition amending policy to reduce premiums and insured amount was not a disposition 2006-08-18 20 June 2006 External T.I. 2005-0149651E5 F- CEE / FEC Income Tax Act- Section 66.1- Subsection 66.1(6)- Canadian exploration expense- Paragraph (f) expenditures to ensure safety of exploration personnel generally qualify if not specifically excluded 2006-08-11 18 July 2006 External T.I. 2005-0159781E5 F- Paragraph 55(3)(a) Income Tax Act- Section 55- Subsection 55(3)- Paragraph 55(3)(a)- Subparagraph 55(3)(a)(i) ss. 55(3)(a)(i) to 55(3)(a)(v) not engaged where Holdco spins off Subco to Sisterco and then redeems the minority shareholding in Holdco of 3rd party 18 July 2006 External T.I. 2005-0162181E5 F- Subsection 74.4(2) Income Tax Act- Section 74.4- Subsection 74.4(2)- Paragraph 74.4(4)(a) a 9% spousal shareholder is a specified shareholder if she also controls a related corporation Income Tax Act- Section 248- Subsection 248(1)- Specified Shareholder 9% shareholder of corporation otherwise held by her spouse becomes a specified shareholder if she wholly-owns a second corporation 29 June 2006 External T.I. 2006-0170641E5 F- Distribution of Corporate Property Income Tax Act- Section 84- Subsection 84(2) 12 month maintenance of business of pipeline corporation contributes to favourable s. 84(2) ruling 18 July 2006 Internal T.I. 2006-0184431I7 F- Prêt d'un gouvernement Income Tax Act- Section 12- Subsection 12(1)- Paragraph 12(1)(x)- Subparagraph 12(1)(x)(iii) ultimate obligation to repay all the amount advanced rendered a loan an unconditional loan rather than a forgivable loan 1 June 1993 External T.I. 93061850- Prestations d'assurance-salaire Income Tax Act- Section 6- Subsection 6(1)- Paragraph 6(1)(f) benefits under wage loss insurance plan were taxable to employees because they had not fully borne the premiums (but s. 6(1)(f)(v) deductions available) 2006-07-28 11 July 2006 External T.I. 2006-0182451E5 F- Indemnité versée par un syndicat Income Tax Act- Section 8- Subsection 8(5) payments by union to members to attend union conventions on their days off reduce the union dues deduction Income Tax Act- Section 3- Paragraph 3(a) payments by union to members to attend union conventions on their days off not taxable 20 July 2006 External T.I. 2005-0124101E5 F- Avantages imposables à des employés Income Tax Act- Section 6- Subsection 6(1)- Paragraph 6(1)(a) a working meal potentially could be excluded Income Tax Act- Section 6- Subsection 6(1)- Paragraph 6(1)(b)- Subparagraph 6(1)(b)(v) exemption inapplicable where union employee negotiating contract is employed by different union Income Tax Act- Section 248- Subsection 248(1)- Office temporary position of unionized employee with union is an "office" 11 July 2006 External T.I. 2005-0152031E5 F- Actions admissibles de petite entreprise Income Tax Act- Section 248- Subsection 248(1)- Small Business Corporation building used 75% in the corporation’s active business operations and 25% for rental use would qualify Income Tax Act- 101-110- Section 110.6- Subsection 110.6(7)- Paragraph 110.6(7)(b) transfer of property to corporation for a s. 85 agreed amount less than FMV of the property and the shares issued therefor does not engage s. 110.6(7)(b) ...

Topic Descriptor 17 May 2022 IFA Roundtable Q. 1, 2022-0933371C6- Meaning of Habitual Abode Income Tax Act- Section 2- Subsection 2(1) CRA residence test of “significant, secondary or other ties” Treaties- Income Tax Conventions- Article 4 habitual abode determined in context based inter alia on relative stays and nature of activities 17 May 2022 IFA Roundtable Q. 2, 2022-0926461C6- Royalty Apportionment 212(1)(d)(vi) Income Tax Act- Section 212- Subsection 212(1) CRA has authority to re-apportion where a royalty allocation is not “reasonable and realistic” Income Tax Act- Section 212- Subsection 212(1)- Paragraph 212(1)(d)- Subparagraph 212(1)(d)(vi) allocation by arm’s length parties of royalty between copyright and trademark must be “reasonable and realistic” 17 May 2022 IFA Roundtable Q. 3, 2022-0926191C6- Meaning of "goods" under 95(3)(b) Income Tax Act- Section 95- Subsection 95(2)- Paragraph 95(2)(b) s. 95(3)(b) exclusion unavailable where foreign sub’s services were the marketing of condo sales by Canco Income Tax Act- Section 95- Subsection 95(3)- Paragraph 95(3)(b) condo inventory did not qualify as “goods” under s. 95(3)(b) 17 May 2022 IFA Roundtable Q. 4, 2022-0931121C6- PLOI Administrative Policies see more detailed summary at Notice to Tax Professionals (see also CRA provides for expanded PLOI election disclosure and permits PLOI elections to be made on loan-by-loan basis) 17 May 2022 IFA Roundtable Q. 5, 2022-0928101C6- Surplus Account Maintenance Income Tax Act- Section 113- Subsection 113(1)- Paragraph 113(1)(d) s. 113 deductions denied if there is insufficient documentation to support the FA’s surplus computations (even where Pt. I tax computations do not depend thereon) 17 May 2022 IFA Roundtable Q. 6, 2022-0929501C6- Exempt Earnings and Residency Info Income Tax Regulations- Regulation 5907- Subsection 5907(1)- Exempt Earnings- Paragraph (d) exempt surplus calculations must be supported by records showing that the FA’s CMC was exercised in a Treaty country Income Tax Regulations- Regulation 5907- Subsection 5907(11.2)- Paragraph 5907(11.2)(a) residence in country for Treaty purposes does not necessarily establish that its CMC is there 17 May 2022 IFA Roundtable Q. 7, 2022-0926451C6- Cryptocurrency reporting Income Tax Act- Section 233.3- Subsection 233.3(1)- Specified Foreign Property- Paragraph (a) CRA is still reviewing whether and when cryptocurrencies may not be foreign property 17 May 2022 IFA Roundtable Q. 8, 2022-0926431C6- Foreign Entity Classification Income Tax Act- Section 248- Subsection 248(1)- Corporation materials that should accompany an entity-classification ruling request 17 May 2022 IFA Roundtable Q. 9, 2022-0926341C6- Contemporaneous Docs and COVID-19 Income Tax Act- Section 247- New- Subsection 247(4) no COVID extension of 6-month deadline under s. 247(4) to complete contemporaneous documentation 17 May 2022 IFA Roundtable Q. 10, 2022-0926331C6- Corporate Residence Approach Income Tax Act- Section 2- Subsection 2(1) board meeting situs not determinative of CMC 17 May 2022 IFA Roundtable Q. 11, 2022-0926411C6 Income Tax Act- 101-110- Section 110- Subsection 110(1.31) the non-qualified securities rules are being reviewed by Finance respecting options such as RSUs that can never generate a s. 110(1)(d) deduction Income Tax Act- 101-110- Section 110- Subsection 110(1.4) requirement to issue s. 110(1.9) notice to employees re RSUs could be avoided by designating them as non-qualified securities under s. 110(1.4) 17 May 2022 IFA Roundtable Q. 12, 2022-0926361C6- Principal Purpose Test (PPT) Income Tax Act- Section 245- Subsection 245(4) PPT approach can inform GAAR analysis Treaties- Multilateral Instrument- Article 7- Article 7(1) CRA is monitoring PPT compliance on a priority basis 17 May 2022 IFA Roundtable Q. 13, 2022-0926381C6- Statistics on MAPs Treaties- Income Tax Conventions- Article 26 around half of CRA’s recent MAP cases resulted in full relief 17 May 2022 IFA Roundtable Q. 14, 2022-0926441C6- Partnership and Subsection 90(3)Election Income Tax Act- Section 90- Subsection 90(4) proposition applied (regarding a s. 90(3) PUC distribution election) that a partnership cannot be a related person ...