Section 126

Subsection 126(1) - Foreign tax deduction

Cases

Interprovincial Pipe Line Company v. Minister of National Revenue, 68 DTC 5093, [1968] CTC 156, [1968] S.C.R. 498

On similar facts to those in the Interprovincial case, infra, it was found that the taxpayer was required to net its interest expense against the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 4 - Subsection 4(3) 59

Interprovincial Pipe Lane Co. v. Minister of National Revenue, 59 DTC 1229, [1959] CTC 339, [1959] S.C.R. 763

S.38(1) of the 1948 Act, which accorded a foreign tax credit for "tax paid by [the taxpayer] to the government of a country other than Canada on...

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See Also

Marin v. The Queen, 2022 CCI 49

France started imposing income tax on rental income as it was earned rather than the tax being payable one year in arrears, as previously....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax taxes for which FTC accorded must be imposed on the income which generates the Canadian taxes from which the credit is claimed 451
Tax Topics - Treaties - Income Tax Conventions - Article 6 may-be-taxed language does not confer an exclusive right to tax 195
Tax Topics - Treaties - Income Tax Conventions - Article 24 Art. 23 of French Treaty inapplicable where income of a particular taxation year was not otherwise taxed twice 246

Burton v Commissioner of Taxation, [2018] FCA 1857, aff'd [2019] FCAFC 141

The taxpayer was an Australian resident who was taxed at the 15% long-term U.S. capital gains rate on his gains on disposal of U.S. oil and gas...

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Words and Phrases
in respect of included
Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 foreign tax credit was not required to be accorded to all the US tax on the gain 361

Ardmore Construction Ltd v Revenue and Customs, [2018] EWCA Civ 1438

The taxpayer (“Ardmore”) was a UK resident company whose assets and activities were almost entirely in the UK. Using working capital, it...

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Arsove v. The Queen, 2016 TCC 283 (Informal Procedure)

The taxpayer, a US citizen resident in Canada, received a distribution from her IRA distribution of U.S.$5,617.78 on which U.S. tax of 10% was...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 application of Art. 24 of Canada-U.S. Treaty to IRA distribution to U.S. citizen 214

White v. The Queen, 2003 DTC 1170, 2003 TCC 668 (Informal Procedure)

The individual taxpayer was not entitled to a foreign tax credit for Australian income taxes paid by Australian companies that had paid him a...

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Shere v. MNR, 89 DTC 201 (TCC)

The territorial source of the employment income of an employee of the New York office of a Canadian crown corporation whose salary was deposited...

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Curtis Brown, Ltd. v. Jarvis (1929), 14 TC 744 (K.B.D.)

The appellant, which carried on business in the U.K. as a literary agent, arranged for the publication by U.K. publishers in the United Kingdom...

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Administrative Policy

11 April 2023 Internal T.I. 2023-0964101I7 - Tax issues for cross-border employees

A portion of the employment duties of a cross-border employee (with a hybrid work arrangement) was exercised from Canada in the year but the...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 FICA contributions of a cross-border employee are deductible only re employment income from duties physically performed in the US 243
Tax Topics - Treaties - Income Tax Conventions - Article 8 contributions to 401(k) plan not deductible to the extent the duties of employment were performed from a Canadian home office 151

20 January 2021 Internal T.I. 2019-0832211I7 - Cross-border Restricted Share Units

In providing general guidance on the allocation of RSU benefits between Canada and a foreign jurisdiction, the Directorate noted that, in dealing...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(i) OECD-inspired hybrid methodology for apportioning the source of RSU benefits between countries 396

26 May 2009 External T.I. 2009-0316841E5 F - Convention de retraite, crédit d'impôt étranger

Before indicating that foreign tax paid on non-business income may be deductible under s. 20(11) or (12) in computing income for purposes of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(1) - Refundable Tax - Paragraph (b) usual Pt. I deductions, including under ss. 20(11) and (12), can apply to computing income under para. (b) 119

26 November 2020 STEP Roundtable Q. 4, 2020-0838001C6 - Foreign Tax Credit

A Canadian-resident individual is subject to Australian gains tax on the gain from selling the shares of a U.K. holding company holding an...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 a capital gain’s geographic source for Canadian FTC purposes was re-sourced to Australia under the Treaty-source rule 288

3 December 2019 CTF Roundtable Q. 2, 2019-0824381C6 - Foreign taxes paid

Respecting the s. 126 credit for foreign taxes paid in the relevant taxation year, where the foreign tax is paid at a different time than the...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 US and UK Treaties do not eliminate FTC requirement that the taxes be paid 251
Tax Topics - Income Tax Act - Section 261 - Subsection 261(2) - Paragraph 261(2)(b) translation of foreign taxes at same FX rate as that used for related income is acceptable 86

5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 12, 2018-0761581C6 F - Foreign Tax Credits related to mutual funds

In the autumn of 2017, CRA requested numerous taxpayers to provide information respecting their foreign tax credit claims including as to the...

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29 May 2018 STEP Roundtable Q. 13, 2018-0744161C6 - 75(2) and Foreign Tax Credit

An individual (the "Settlor") creates an alter ego trust and transferred inter alia U.S. stocks to the trust. S. 75(2) applies to deem the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) US withholding taxes borne by s. 75(2) trust might reduce the attributed income amount 94

29 May 2018 STEP Roundtable Q. 12, 2018-0748811C6 - US Transition Tax

A U.S. citizen resident in Canada holds a controlling interest in a U.K. company. The U.S. imposes its one time transition tax on the "earnings...

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29 January 2018 External T.I. 2017-0682301E5 - Deemed Distribution and Withdrawal from IRA

Where a U.S. long-term resident relinquishes her green card (or a U.S. citizen renounced citizenship) after having become a Canadian resident,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) - Clause 56(1)(a)(i)(C.1) the deemed U.S. income inclusion from an IRA on renouncing U.S. citizenship or relinquishing a green card also is recognized for ITA purposes 365
Tax Topics - Income Tax Act - Section 56 - Subsection 56(12) deemed ITA inclusion on deemed distribution from IRA on renouncing U.S. citizenship or relinquishing green card 78

8 September 2017 External T.I. 2014-0558601E5 - Amount of foreign withholding tax paid by partner

Mr. A and Mr. B each have a 50% interest in AB Partnership, and are resident in Country X and Canada, respectively. On payment of a $1,000...

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13 June 2017 STEP Roundtable Q. 4, 2017-0695141C6 - U.S. grantor trust

Mr. C, who is a Canadian resident and U.S. citizen, settled a revocable living trust for him and his family which, as a “grantor trust”, is...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 94 - Subsection 94(16) election of US-citizen/Cdn-resident beneficiary of grantor trust so as to generate FTC 254
Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(5) - Paragraph 108(5)(a) income from factually U.S.-resident but s. 94(3) trust was U.S.-sourced 114

13 April 2017 External T.I. 2015-0601781E5 - U.S. tax paid in respect of an LLC's income

A Canadian-resident individual who is a member of a U.S. LLC pays tax in the U.S. on his or her share of profit of the LLC for a particular...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 Canada's denial of foreign tax credits re undistributed LLC income is consistent with Art. 24 of Canada-US Treaty 365

12 July 2016 External T.I. 2014-0560361E5 - Cdn beneficiary of US living trust

In the course of a general discussion of the Canadian tax treatment of a taxpayer holding an interest in a U.S. “living trust,” CRA stated:

A...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) question of fact whether a U.S. revocable living trust is an excluded trust 134
Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) potential application to U.S. revocable living trust 190

8 December 2016 Internal T.I. 2016-0634231I7 - Pension received from the European Union

A Canadian taxpayer receives pension amounts from the EU as a result of employment there (while still a UK resident). The amount of the pension...

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Words and Phrases
government

29 November 2016 CTF Roundtable Q. 12, 2016-0669851C6 - Support for US FTC Claims

This question and response is similar to 2016-0634941C6. The questions included: Where a taxpayer’s employment duties are performed in a large...

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May 2016 Alberta CPA Roundtable, Q.10

In a similar exchange to that at 2016-0669851C6, CRA was also asked, “will taxpayers have any issues with FTCs that are reported on a Canadian...

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3 February 2016 External T.I. 2014-0548111E5 - U.S. tax paid in respect of an LLC's income

Mr. A, Canadian resident and citizen subject to a Canadian marginal rate of tax of 50%, was a member of an LLC carrying on a U.S. active business...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 88 - Subsection 88(3) - Paragraph 88(3)(d) no deemed dividend 133
Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax LLC tax paid by Cdn member not re business 169
Tax Topics - Income Tax Act - Section 20 - Subsection 20(11) only income was taxable capital gains 136
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) s. 20(14) deduction for US operating-income taxes imposed on Cdn LLC member even where his only Cdn income from LLC is taxable capital gain 439
Tax Topics - Treaties - Income Tax Conventions - Article 24 Treaty sourcing rule does not trench on domestic FTC 215

2015 Ruling 2015-0572541R3 - Foreign Tax Credit on Transfer of 401(k) to RRSP

A Canadian-resident individual (the "Individual") who was not a US citizen contributed to a 401(k) plan while employed in the U.S. He will...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax additional 10% tax on withdrawal from 401(k) plan, as income tax 123
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(j) 31

23 July 2015 External T.I. 2014-0546571E5 - Foreign Tax Credit

Effective October 1, 2007, the "secondary tax on dividends" subjected dividends paid by a South African company to a non-resident to tax on the...

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30 October 2014 External T.I. 2013-0500491E5 - Pension from XXXXXXXXXX

Is tax withheld by the European Union on a pension received by a Canadian resident from an EU organization and which is exempt from national tax...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110 - Subsection 110(1) - Paragraph 110(1)(f) - Subparagraph 110(1)(f)(i) EU Treaty does not engage s. 110(1)(f)(i) exemption 98
Tax Topics - Income Tax Act - Section 126 - Subsection 126(3) pension income not employment income 76

23 July 2014 Internal T.I. 2014-0525231I7 - Foreign tax credit

Canco received a dividend from a Japanese resident company foreign affiliate ("Forco"), which was subject to Japanese withholding tax and resulted...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax foreign tax not a "tax" if no refund sought 210
Tax Topics - Treaties - Income Tax Conventions - Article 24 s. 40(3) gain had Cdn source because not taxed in Japan 238

11 September 2014 External T.I. 2013-0495091E5 - Reimbursement of employee's foreign tax

Under the tax laws of Country A (a non-Treaty country), Canadian resident employees of a Canadian employer who are working there are considered by...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) taxable benefit from foreign tax reimbursement 157

10 June 2013 STEP Roundtable, 2013-0480311C6 - 2013 STEP CRA Roundtable - Question 5

The starting point in determining the amount of a foreign tax credit available to a part-year resident of Canada in respect of a particular...

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28 May 2013 Internal T.I. 2013-0476381I7 - Deemed Resident Trusts & Foreign Tax Credit

A trust was settled in the U.S. with marketable securities having an adjusted cost base and fair market value of $100,000. The settlor moved to...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) no s. 20(12) deduction available where only a capital gain 154
Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(b) 295

13 August 2010 External T.I. 2010-0359571E5 F - Crédit d'impôt étranger

Corporation A, which produces television programs for which it holds the rights of exploitation, sells such programs through Corporation B (also a...

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27 October 2005 External T.I. 2004-0103431E5 F - Crédit d'impôt étranger-Gain en capital

A Canadian resident, who owned a condominium in Florida for his personal use, disposed of the condominium at a gain that was taxed in the U.S.,...

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29 August 2003 Internal T.I. 2003-0018497 F - L'Année d'imposition diffère

Regarding the calculation of the foreign tax credit in respect of tax paid by a taxpayer with a calendar taxation year for ITA purpose to the...

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15 April 2003 External T.I. 2002-0139305 F - Immigration

CCRA indicated that where a taxpayer disposed of a ½ co-ownership interest in a US rental building whose ACB but not its capital cost had been...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) - Paragraph 128.1(1)(c) ss. 128.1(1)(b) and (c), unlike former s. 48(3), apply also for CCA/recapture purposes 163
Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(i) step-up of partnership interest on immigration to Canada neutralized the capital gain on partnership property when partnership wound up 146

20 February 2003 External T.I. 2002-014360

In response to a query as to whether U.S. income tax paid in excess of the proportionate Canadian income tax rate on U.S. non-investment income...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 39

5 April 2001 External T.I. 2000-0043615 - Taxation of Shareholder of US S-Corp

Unless an agreement with the Canadian competent authority is obtained pursuant to Article XXIX(5) of the Canada-U.S. Income Tax Convention, the...

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14 December 2000 External T.I. 2000-0029575 - section 126 of the Act

A Canadian resident corporation ("Xco") with a November 30, 2000 taxation year end is a member of a partnership that has a March 31, 2000 taxation...

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8 September 1998 External T.I. 9820085 - ARGENTINA TAX ON RENTAL OF SOFTWARE

Where under RC's interpretation of the Canada-Argentina Treaty, the rate of Argentinean tax payable on software rental payments received by a...

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26 January 1996 External T.I. 9516185 - MEANING OF "FOR THE YEAR" IN SECTION 126

Respecting a situation where a Canadian resident who also was a U.S. resident is required for Canadian purposes to report income in respect of a...

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21 April 1995 External T.I. 9422935 - FOREIGN TAX CREDIT (HAA 7988-1)

The Canadian beneficiary of a non-discretionary U.K. trust or (by virtue of a U.K. extra-statutory concession) the Canadian beneficiary of a U.K....

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14 December 1994 External T.I. 9430525 - FOREIGN TAX CREDIT

The adjusted net income used in computing a foreign tax credit under s. 126(1) or (2) is not reduced by the deduction under s. 110(1)(k).

1 September 1994 Internal T.I. 9331436 - MEANING OF PROPORTION IN 126(1)(B)

Although the word "proportion" can include a fraction that is greater than 1 (see Quemont Mining Corp. Ltd. v. MNR, 66 DTC 5376 (Ex Ct), at 5386),...

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17 May 1993 T.I. (Tax Window, No. 31, p. 12, ¶2525)

Where a taxpayer sells shares of a U.S. corporation and receives in exchange therefor an interest-bearing note under which no payments of accrued...

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5 March 1993 Memorandum (Tax Window, No. 30, p. 17, ¶2471)

Re treatment of a reimbursement received by an employee after his return to Canada as a result of the agreement of his employer to be responsible...

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20 January 1993 T.I. 921629 (November 1993 Access Letter, p. 506, ¶C117-209)

U.S. taxes payable by a Canadian-resident individual on the sale to a U.S. resident of the shares of a taxable Canadian corporation holding U.S....

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17 November 1992 T.I. 923120 (September 1993 Access Letter, p. 413, ¶C56-250)

Where a lump sum payment is received out of a foreign pension plan and rolled into an RRSP, the numerator under s. 126(1)(b)(i) will not be...

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IT-270R2 "Foreign Tax Credit"

IT-395R2 "Foreign Tax Credit - Foreign-Source Capital Gains and Losses"

IT-194 "Foreign Tax Credit - Part-Time Residents"

IT-183 "Foreign-Tax Credit - Member of a Partnership"

Articles

Kevyn Nightingale, "American Professionals in Canada", Canadian Tax Journal, (2017) 65:4, 893-937

No additional U.S. tax where income earned directly by U.S. citizen/Cdn resident (p. 898)

…US taxable income will typically be lower than...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 74.5 - Subsection 74.5(11) use of gift of discretionary shares to address PFIC issues 288

Manjit Singh, Andrew Spiro, "The Canadian Treatment of Foreign Taxes", 2014 Conference Report, (Canadian Tax Foundation), 22:1-37

Pooling of high and low state tax rates (p. 4)

Because the foreign tax credit is computed on a country-by-country pooling basis, where a...

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Jack Bernstein, "Canada-US Tax Traps for LLCs", Canadian Tax Highlights, Volume 22, Number 2, February 2014, p. 11

FTC problem for undistributed LLC income (p. 12)

Assume that a Canadian-resident individual is a member of an LLC that carries on a trade or...

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Kenneth Snider, "The Foreign Tax Credit Rules", 2001 Conference Report, c. 14.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(4.1) 0

Subsection 126(2) - Idem [Authorized foreign bank]

Cases

The Queen v. Bank of Nova Scotia, 81 DTC 5115, [1981] CTC 162 (FCA)

The right to claim the tax credit arises in the year that the income in the foreign country is earned. To hold that the amount of the credit is...

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Words and Phrases
payable

See Also

4145356 Canada Limited v. The Queen, 2011 DTC 1171 [at 937], 2011 TCC 220

The taxpayer acquired units in a Delaware limited partnership ("Crown Point"), whose other limited partner ("Altier") and whose general partner...

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Words and Phrases
paid

C.I.R. v. HK-TVB International Ltd., [1992] BTC 524 (PC)

The Hong Kong taxpayer received from its Hong Kong parent the exclusive right to sublicense outside Hong Kong films to which its parent had the...

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Leonard Reeves Incorporated v. Minister of National Revenue, 91 DTC 425, [1991] 1 CTC 2293 (TCC)

A U.S. partnership in which the taxpayer had a 45% partnership interest and which had a calendar fiscal year-end disposed of a U.S. trailer park...

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Administrative Policy

8 August 2013 External T.I. 2013-0477461E5 F - Foreign Tax Credit under 126(2) of ITA

Canco paid an amount to its non-resident parent (Parentco) to reimburse Parentco for taxes that Parentco had paid to the foreign tax authority as...

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11 January 2001 Internal T.I. 2000-0001017 - Sourcing of income & foreign tax credit

The Directorate agreed that the taxpayer, which was a Canadian maunufacturer transferring some of its goods to a Japanese branch for sale there,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) place of contract not primary determinant 281

IT-520 "Unused Foreign Tax Credits - Carryforward and Carryback"

Articles

Kyle B. Lamothe, "The Missing Provincial Tax Credit for Foreign Business-Income Taxhttps://www.ctf.ca/ctfweb/FR/Newsletters/Canadian_Tax_Focus/2016/2/160213.aspx", Canadian Tax Focus, Vol. 6, Number 2, May 2016, p. 10

No provincial credits for foreign income taxes on business income (p. 10)

[C]redit for foreign business-income tax from provincial tax...is not...

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Manjit Singh, Andrew Spiro, "The Canadian Treatment of Foreign Taxes", 2014 Conference Report, (Canadian Tax Foundation), 22:1-37

Reduction of Canadian taxes otherwise payable by losses (p.22:5)

Determining worldwide income involves many nuances that affect CTOP and therefore...

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Kenneth Snider, Michael Platt, "The Ontario Foreign Tax Credit Regime after Harmonization", International Tax, No. 64, CCH, June 2012, p. 12: Discusses double tax problem that arises inter alia where a Canadian corporation subject to Ontario tax has foreign-source business income but no foreign permananet establishment.

Tremblay, "Foreign Tax Credit Planning", 1993 Corporate Management Tax Conference Report, c. 3.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 0

Subsection 126(2.1) - Amount determined for purposes of para. (2)(b)

Administrative Policy

11 January 2001 Internal T.I. 2000-000101

A Canadian company that was engaged in manufacturing and processing activities in Canada and which had a Japanese branch through which it...

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8 July 1992 T.I. 921814

Where business profits are allocated to a permanent establishment in a foreign country pursuant to the business profits article of a treaty with...

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88 CPTJ - Q.5

Deductions of FEDE must first be allocated to a country to the extent of that country's qualifying income to a maximum of the unused notional...

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Subsection 126(2.2) - Non-resident’s foreign tax deduction

Articles

Steve Suarez, "Tax Planning for Departure from Canada", 1991 Canadian Tax Journal 7, p. 1.

Subsection 126(2.21) - Former resident — deduction

Administrative Policy

11 October 2017 External T.I. 2016-0673171E5 - Foreign tax credit - former resident

A Korean individual became a resident of Canada in 2005 while owning Korean real property that had previously been purchased $600,000 and that had...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(b) - Subparagraph 152(4)(b)(i) waiver generally not granted to extend 6-year period to permit s. 126(2.21) credit 230

11 October 2017 External T.I. 2016-0660421E5 - Foreign tax credit – former resident

Where an individual, who had been resident in Canada for over five years, realized a capital gain from the deemed disposition of non-Canadian real...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(b) - Subparagraph 152(4)(b)(i) waivers generally cannot be used to extend the 6-year period for claiming a FTC under s. 126(2.21) 302

6 February 2011 External T.I. 2011-0427211E5 - Recovery of Departure tax

the tax credit is limited (under s. 126(2.21(a)) to the total of foreign taxes paid in respect of the disposition that can reasonably be...

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Subsection 126(3) - Employees of international organizations

Administrative Policy

30 October 2014 External T.I. 2013-0500491E5 - Pension from XXXXXXXXXX

Does tax withheld by the European Union on a pension received by a Canadian resident from an EU organization which was his or her former employer...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110 - Subsection 110(1) - Paragraph 110(1)(f) - Subparagraph 110(1)(f)(i) EU Treaty does not engage s. 110(1)(f)(i) exemption 98
Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) EU withholding does not qualify as state tax 124

9 April 2013 External T.I. 2012-0461051E5 F - Employee of an international organization

A Canadian citizen and resident is working with an organization that provides services with an unidentified relationship with the mandate of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 8900 - Subsection 8900(1) - Paragraph 8900(1)(b) organization was not a specialized agency related to the UN 114
Tax Topics - Income Tax Act - Section 81 - Subsection 81(1) - Paragraph 81(1)(a) exemption for UN officials did not apply to a Canadian resident 289

6 December 2001 Internal T.I. 2001-0110047 F - Revenu d'emploi organisation intern.

In finding that an organization did not qualify under s. 2, the Directorate stated:

Under section 2 … an "international organization" means an...

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Subsection 126(4.1) - No economic profit

Administrative Policy

Articles

Kenneth Snider, "The Foreign Tax Credit Rules", 2001 Conference Report, c. 14.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) 0

Subsection 126(4.2) - Short-term securities acquisitions

Administrative Policy

Manjit Singh and Andrew Spiro, "The Canadian Treatment of Foreign Taxes," draft version of paper for CTF 2014 Conference Report.

Denial of excess credits (p.5)

The rule in subsection 126(4.2) does not fully deny a foreign tax credit, but rather limits the creditable foreign...

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Subsection 126(4.5)

Articles

Edward Miller, Matias Milet, "Derivative Forward Agreements and Synthetic Disposition Arrangements", 2013 Conference Report, (Canadian Tax Foundation), pp 10:1-50

Overview of s. 126(4.5) (pp. 10:41-42)

[S]ubsection 126(4.5) affects a taxpayer's holding period for purposes of applying...subsection 126(4.2), a...

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Subsection 126(6) - Rules of construction

Paragraph 126(6)(c)

Administrative Policy

5 November 2012 Internal T.I. 2012-0462151I7 - Foreign Tax Credits

Canco held portfolio investments in shares of U.S. companies in connection with funding its insurance liabilities. The shares were mark-to-market...

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Subsection 126(7) - Definitions

Business-Income Tax

Cases

Canadian Wireless Telecommunications Association v. Nanaimo (City), 2012 DTC 5131 [at 7250], 2012 BCSC 1017

Ehrcke J. found that a Nanaimo bylaw requiring a $30 charge be collected from cellphone users for each 911 emergency call was a tax rather than a...

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See Also

Clevite Development Ltd. v. MNR, 61 DTC 1093, [1961] CTC 147 (Ex. Ct.)

Royalties received by the taxpayer from foreign patents were found to be income from a business rather than income from the mere holding of...

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Administrative Policy

24 November 2013 CTF Roundtable, 2013-0508171C6 - Income or profits tax

Would a tax on gross revenue qualify as an income or profits tax? CRA stated:

[W]e will generally accept that tax paid to a foreign country will...

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5 September 2013 External T.I. 2011-0431031E5 - Guatemala's taxes

A Guatemalan tax on gross revenue at a rate (for 2013) of 5% up to a low threshold (approx. Cdn. $3,925) and 6% above that, qualified as an...

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11 May 2012 External T.I. 2011-0428791E5 - Foreign Tax Credit

Respecting a question as to whether state franchise tax paid by a Canadian taxpayer (Canco) for the business income tax credit, CRA indicated that...

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9 February 2012 External T.I. 2008-0280941E5 F - Foreign sourced income - transportation

Canco, which carries on a freight transportation business in Canada and the U.S., is subject to New York State franchise tax, which generally...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(b) s. 4(1)(b) generally applied on a jurisdictional basis 157
Tax Topics - Income Tax Act - Section 2 - Subsection 2(3) - Paragraph 2(3)(b) incidental business activities in jurisdiction may not constitute carrying on business there 51
Tax Topics - Income Tax Act - Section 126 - Subsection 126(9) s. 4(1)(b) applied for s. 126(9) purposes 161

4 July 2002 Internal T.I. 2002-0148217 - Foreign Tax Credit, U.S. Partnership

Where a limited partners in a U.S. partnership is required to pay U.S. tax on his share of the income of the U.S. partnership, such tax will be...

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24 October 2000 External T.I. 1999-0015115 - Michigan Single Business Tax

After noting that a foreign entity will be subject to the Michigan single business tax even though it has no income or it is exempt from federal...

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2000 Ruling 9929203 - FOREIGN TAX CREDIT - FOREIGN ELECTION

U.S. tax paid by a Canadian corporation as a consequence of an s. 338(g) election and in connection with transactions under which it is acquired...

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8 November 1999 External T.I. 9914135 - INTEREST & PENALTY RE MICHIGAN SBT

The Michigan single business tax is not an income or profits tax for purposes of s. 126.

Income Tax Technical News, No. 8, 3 September 1996 "Treatment of United States Unitary State Taxes".

24 June 1996 Internal T.I. 9612907 - CREDITABILTY OF U.S. BRANCH PROFITS TAX

The U.S. branch profits tax levied under s. 884(a) of the Internal Revenue Code is creditable against Canadian income tax pursuant to s. 126(2) of...

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12 August 1996 External T.I. 9620865 - NEW YORK CITY BANKING CORPORATION TAX

In those taxable years in which the liability of a Canadian chartered bank to New York City for Banking Corporation Tax is computed by reference...

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10 July 1995 External T.I. 9430445 - PENNSYLVANIA FRANCHISE TAX

The Pennsylvania net corporate income tax (imposed on Canadian trucking companies by apportioning their income on the basis of the percentage of...

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93 C.M.TC- Q. 5

The branch-level interest tax imposed pursuant to I.R.C. s. 884(f)(1)(B) is not considered to be an "income or profits tax" for purposes of s....

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18 May 1993 T.I. (Tax Window, No. 31, p. 13, ¶2527)

The portion of New York State franchise tax that is based on net income will be considered an income or profits tax paid to a government other...

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6 April 1993 External T.I. 9301815 F - HA7988 Foreign Tax Credit - Member of Partnership

Where a U.S. partnership in which a Canadian partnership holds a 99.9% interest pays U.S. corporate income tax (as a result of being taxed for...

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28 January 1993 T.I. (Tax Window, No. 28, p. 9, ¶2403)

Where, under French tax law, a Canadian-resident artistic loan-out corporation effectively is disregarded so that the artist is considered to be...

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23 November 1992 T.I. 922181 (September 1993 Access Letter, p. 417, ¶C96-044)

Where a société en nom collectif is liable for French income tax as a result of electing to be taxed as a corporation under French income tax...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 39

Non-Business-Income Tax

Cases

The Queen v. Hoffman, 85 DTC 5508, [1985] 2 CTC 347 (FCTD)

It was indicated, obiter, that U.S. social security contributions constituted non-business-income taxes of a U.S. citizen employee of a Canadian...

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See Also

Marin v. The Queen, 2022 CCI 49

The taxpayer, a Canadian resident, was generally subject to French income tax on the rental income from a French property to the extent of his...

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Words and Phrases
for
Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 6 may-be-taxed language does not confer an exclusive right to tax 195
Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) FTC domestic and Treaty provisions are applied re the particular year in which the subject income was earned 193
Tax Topics - Treaties - Income Tax Conventions - Article 24 Art. 23 of French Treaty inapplicable where income of a particular taxation year was not otherwise taxed twice 246

Zong v. The Queen, 2019 TCC 270 (Informal Procedure)

The taxpayer, a resident of both Canada and the UK, was employed full-time in the UK for several years. CRA denied the taxpayer’s foreign tax...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 mandatory contributions by a dual resident to the UK’s national insurance scheme did not qualify for Treaty relief 165

Nadeau v. The Queen, 2007 DTC 1670, 2004 TCC 433 (Informal Procedure)

Premiums paid by the taxpayer to the Maine State Retirement System in the course of her employment as a main teacher did not qualify as taxes...

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Meyer v. The Queen, 2004 DTC 2393, 2004 TCC 199 (Informal Procedure)

The taxpayer, who was a U.S. citizen resident in Canada, did not claim treaty benefits when filing his U.S. return, with the result that his...

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Words and Phrases
tax
Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 24 overpayment of U.S. tax not U.S. tax 148
Tax Topics - Treaties - Income Tax Conventions - Article 26 85

Yates v. The Queen, 2001 DTC 761 (TCC) (Informal Procedure)

Contributions paid by the taxpayer (a former resident of the U.K. and a dual citizen of Canada and the U.K.) to the U.K. Inland Revenue Department...

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Words and Phrases
tax

Yates v. GCA International Ltd., [1991] BTC 107 (Ch. D.)

The U.K. taxpayer was entitled under a contract with a Venezuelan company to £97,345 for its work in carrying out a comprehensive field...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) petroleum consulting income rose only partly in field 97

Newfoundland and Labrador Corporation Ltd. et al. v. Attorney General of Newfoundland, 138 DLR (3d) 577, [1982] 2 S.C.R. 260

In finding that a tax of 15% imposed on gross income of a taxpayer from mine operations minus deductions for reasonable expenses and outlays,...

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Inland Steel Co. v. U.S., 677 F. 2d 72, 230 Ct. Cl. 314, 82-1 U.S.TC P9301 (1982)

In finding that the taxes imposed under the Mining Tax Act (Ontario) (the "OMT") on an open pit iron ore mine did not constitute "any income, war...

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Lai v. MNR, 80 DTC 1044 (T.R.B.)

A Canadian resident paid "property tax" pursuant to s. 5(1) of the Inland Revenue Ordinance (Hong Kong) at a standard rate of 15% on the "net...

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Canadian Industrial Gas & Oil Ltd. v. Government of Saskatchewan et al., 80 DLR (3d) 449, [1978] 2 S.C.R. 545

Dickson, J. made a finding (at p. 477) in which the majority concurred (at p. 458) that a "mineral income tax" which effectively taxed 100% of the...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Subsection 92(2) provincial tax styled as a direct "income tax" was in substance an ultra vires indirct tax on oil exports 128

Bank of America National Trust and Savings Association v. U.S., 72-1 U.S.TC 84456, 198 Ct. Cl. 263, 459 F. 2d 513, cert. denied 490 U.S. 949 (1972)

Taxes levied in Thailand, the Philippines and Argentina on the gross income derived by the taxpayer from its branch bank business in those...

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Allstate Insurance Co. v. U.S., 419 F. 2d 409 (Ct. Cl. 1969)

Premium taxes which an Illinois stock casualty insurance company (which sold insurance policies in each of the provinces of Canada) paid on the...

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Words and Phrases
excise tax

Quemont Mining Corp. Ltd. v. MNR, 66 DTC 5376, [1966] CTC 570 (Ex. Ct.), aff'd 70 DTC 6046 (SCC)

Cattanach J. stated respecting the word "profits" in Regulation 1201:

"I can see no justifiable reason for construing the word 'profits' as used...

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Words and Phrases
profits

Seley v. MNR, 62 DTC 565, 30 Tax A.B.C. 243

The taxpayer was entitled to claim a foreign tax credit in respect of U.S. social security taxes deducted from his remuneration by his U.S....

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Abbot Laboratories International Co. v. U.S., 160 F. Supp. 321 (D. Ct. 1958), aff'd 267 F. 2d 940 (C.A. 1959)

The Lanman case was followed in finding that the Colombian patrimony tax was not an income tax within the meaning of s. 131(a) of the 1939 Code....

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Lanman & Kemp-Barclay & Co. of Colombia v. Commissioner of Internal Revenue, 26 TC 582 (1956)

The Republic of Colombia levied, pursuant to the same tax statute under which an income tax and an excess profits tax was levied, a capital tax...

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Words and Phrases
income tax

Commissioner v. American Metal Co. (1955), 221 F. 2d 134 (2d Cir. 1955), cert. denied 350 U.S. 829 (1955)

A Mexican production tax which was applicable when ore was extracted from the subsoil, irrespective of whether it was subsequently processed or...

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B.C. Insurance Co. v. MNR, 54 DTC 422, 11 Tax A.B.C. 225

A 10% tax imposed under the Income Tax and Social Services Contribution Assessment Act 1936-1952 (Australia) on the gross amount of premiums...

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Helvering v. Queen Insurance Co. (1940), 115 F. 2d 341 (2d Cir. 1940), cert. denied 312 U.S. 706 (1940)

A U.S. stock insurance company doing a fire and marine business in the U.S. and Canada became liable in 1934 for Canadian excise upon its Canadian...

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London County Council v. A.G., [1901] A.C. 26, 4 TC 265 (HL)

S.24(3) of the Customs and Inland Revenue Act, 1888 provided that "upon payment of any interest of money or annuities charged with income tax...

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Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Legislative History 33

Administrative Policy

3 February 2016 External T.I. 2014-0548111E5 - U.S. tax paid in respect of an LLC's income

Mr. A, Canadian resident and citizen, was a members of an LLC carrying on a U.S. active business and which was treated as a partnership for Code...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 88 - Subsection 88(3) - Paragraph 88(3)(d) no deemed dividend 133
Tax Topics - Income Tax Act - Section 20 - Subsection 20(11) only income was taxable capital gains 136
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) s. 20(14) deduction for US operating-income taxes imposed on Cdn LLC member even where his only Cdn income from LLC is taxable capital gain 439
Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) FTC for US operating-income taxes imposed on Cdn LLC member even where his only Cdn income from LLC is taxable capital gain 331
Tax Topics - Treaties - Income Tax Conventions - Article 24 Treaty sourcing rule does not trench on domestic FTC 215

10 June 2016 STEP Roundtable Q. 9, 2016-0634941C6 - Support for US FTC Claims

Recently, CRA has been requesting taxpayers to obtain a transcript from the IRS where foreign tax credits were claimed for U.S. tax paid. Why this...

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2015 Ruling 2015-0572541R3 - Foreign Tax Credit on Transfer of 401(k) to RRSP

A Canadian-resident individual (the "Individual") contributed to a 401(k) plan while employed in the U.S. He will withdraw the amount in the plan...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) s. 60(j) deduction does not reduce foreign source income for FTC purposes 195
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(j) 31

2015 Ruling 2015-0570291R3 - Foreign tax credit on income from a trust

After ruling that proceeds from an IRA of a deceased U.S. resident which were distributed by her estate to a U.S.-resident trust, and by it to...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13) distribution of IRA proceeds by U.S.-resident trust is income under s. 104(13)(a) 301

23 July 2014 Internal T.I. 2014-0525231I7 - Foreign tax credit

Canco received a dividend from a Japanese resident company foreign affiliate ("Forco"), which was subject to Japanese withholding tax and resulted...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) s. 40(3) gain had Cdn source/foreign tax not a "tax" if no refund sought 426
Tax Topics - Treaties - Income Tax Conventions - Article 24 s. 40(3) gain had Cdn source because not taxed in Japan 238

10 June 2013 STEP Roundtable, 2013-0480371C6 - 2013 STEP Question 13 - US LLCs and 20(11)

US tax is paid on the income of an LLC by an individual resident in Canada to which the LLC is not a controlled foreign affiliate (so that its...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(11) s. 20(11) becomes applicable where LLC income distributed 282

5 October 2012 Roundtable, 2012-0451251C6 F - Excess of foreign tax withheld at source

Tax is systematically withheld on income from ADRs at above the maximum rates permitted by the conventions. Can such withholdings be considered...

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Words and Phrases
income or profits tax
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose tax withheld in excess of Treaty-rate is not deductible as an expense 69

19 April 2011 Memo 2011-0398741I7

The taxpayer’s U.S. 1040NR showed a normal US tax payable and a 10% additional US tax payable on the withdrawal from a U.S. IRA, with the...

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12 June 2009 External T.I. 2009-0316511E5 F - Charges sociales et autres retenues France

Can the following deductions made by France from the salary of an individual who has been resident in Canada for less than 60 months qualify as a...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 18 list of pension plans recognized for French tax purposes re Art. XXIX(5) of French Treaty 423

6 May 2008 External T.I. 2007-0254661E5 F - Partie B Medicare

In finding that premiums paid for U.S. Medicare Part B by a recipient of U.S. pension income did not qualify as foreign non-business income tax,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Private Health Services Plan U.S. Medicare Part B premiums may be eligible respecting the medical tax credit 82

11 September 2007 External T.I. 2006-0195851E5 F - Crédit pour impôt étranger

Xco, a Canadian corporation without a permanent establishment in Romania and owning more than 50% of the shares of S.A.co, a Romanian corporation,...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 7 reasonable management fees come within the business profits rather than other income Article 231

8 November 2004 External T.I. 2004-0092021E5 F - RDTOH: Foreign tax credit under sub. 126(1)

A CCPC derives its income for a taxation year from property situated in Canada and from a business carried on in Canada (the generation of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 129 - Subsection 129(4) - Non-Eligible Refundable Dividend Tax on Hand - Paragraph (a) - Subparagraph (a)(i) - Variable B RDTOH was reduced by s. 126(1) credit even where it related to a Canadian business rather than a source of property income 217

13 July 2004 External T.I. 2003-0049081E5 - FTC beneficiary of Canadian resident trust

Where the Canadian beneficiary of a Canadian trust is required to pay U.S. income taxes on his or her share of income earned by the trust in...

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1 February 2005 External T.I. 2004-0083921E5 F - Société mandataire, gain & CIÉ

A corporation acquired a building in the US as agent for its individual shareholder pursuant to a nominee agreement. However, when a capital gain...

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26 June 2003 Internal T.I. 2002-0169607 F - Sécurité sociale française

Payroll taxes and social security contributions under the French social security system qualified of for a foreign tax credit given inter alia...

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3 November 1998 External T.I. 9810115 - FOREIGN TAX CREDIT AND S-CORPORATIONS

Where a U.S. citizen had emigrated to Canada while owning real property situate in the U.S. with a cost of $100 and having a fair market value at...

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16 September 1997 Background Paper for Round Table Question No. 9717730

Discussion of situations where U.S. persons resident in Canada become liable for U.S. AMT solely as a result of the application of the rule...

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12 April 1995 External T.I. 9237145 F - Foreign Tax Credits - Consolidated Foreign Returns

Where a profitable Canadian subsidiary is permitted for U.S. tax purposes to be included in a consolidated group tax return, payments made by the...

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23 March 1994 Administrative Letter 9332416 F - Japan Inhabitant's Tax — Income or Profits Tax

The municipal inhabitant's tax imposed by Japan is an income tax with the exception of any per capita tax included in that tax.

29 March 1994 Administrative Letter 9317296 F - 6359 Foreign Tax Credit - Social Security Contributions

Mandatory contributions made to a foreign social security plan, which is similar to the U.S. one, for example, to the German social security plan,...

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8 March 1994 External T.I. 9302945 F - 6359 Foreign Tax Credit - Social Security Contributions

Contributions made by a Canadian resident, temporarily working in Germany, to a German government pension plan and a German government health plan...

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10 February 1993 Memorandum (Tax Window, No. 29, p. 5, ¶2432)

Foreign tax paid in respect of a capital gains reserve that was included in income in the foreign jurisdiction would normally qualify as a...

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18 July 1991 Memorandum (Tax Window, No. 6, p. 15, ¶1359)

The U.S. alternative minimum tax imposed by s. 55 of the I.R.C. is an income or profits tax. The apportionment of the U.S. alternative minimum tax...

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6 May 1991 T.I. (Tax Window, No. 3, p. 27, ¶1240)

The Canadian beneficiaries of a U.K. trust whose trust income is subject to 45% U.K. tax are not entitled to claim a foreign tax credit under s....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Nature of Income 36

20 March 1991 T.I. (Tax Window, No. 1, p. 19, ¶1157)

The U.S. "excess retirement distributions excise tax" which is levied on the aggregate distributions from qualified pension plans is not an income...

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25 March 1991 Memo 7-4727

US withholding taxes paid on the redemption of preference shares of a US subsidiary qualified as income or profits taxes within the meaning of s....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) US withholding on share redemption was income tax 81

15 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 23, ¶1021)

Any excess U.S. tax paid by a Canadian resident individual as a result of a sub-chapter S election is creditable for purposes of s. 126(1).

90 C.P.T.J. - Q.10

Where a foreign country has no income taxes but a very high royalty rate on the production under an oil and gas production sharing contract (i.e.,...

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89 C.R. - Q.4

RC accepts apportionment of foreign income and foreign taxes paid when a foreign country's taxation year differs from Canada's calendar taxation...

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88 C.R. - Q.57

To the extent that a tax-sparing provision within a Convention deems an amount to have been paid to the government of a foreign country, the taxes...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) Treaty inapplicability 38

Articles

Kailey McLeod, Nadia Pulla, "Misalignment of Federal and Provincial Tax Credits", Canadian Tax Focus, Vol. 9, No. 4, November 2019, p.8

Absence of tax credit for US estate taxes in Ontario and B.C. (p. 8)

[B]ecause US federal and state estate taxes are an inheritance tax and not a...

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Manjit Singh, Andrew Spiro, "The Canadian Treatment of Foreign Taxes", 2014 Conference Report, (Canadian Tax Foundation), 22:1-37

Determination of partner's share of partnership tax (p.9)

[T]he suggestion [1.39 of S 5-F2-C1] that a taxpayer's share of taxes paid by a...

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Matthew Warren, Eileen Scott, Alan Fischl, Sergio Lugo Dimas, "U.S. Foreign Tax Credibility of the Mexican Cash Deposits Tax", Journal of International Taxation, October 2013, p. 37

Imposition of IDE (p. 37)

…The Mexican government enacted the cash deposits tax (impuesto a los deploacutejsitos en efectivo) (IDE) in...

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Subsection 126(9)

Administrative Policy

9 February 2012 External T.I. 2008-0280941E5 F - Foreign sourced income - transportation

Canco, which carries on a freight transportation business in Canada and the U.S., is subject to New York State franchise tax. CRA noted that in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(b) s. 4(1)(b) generally applied on a jurisdictional basis 157
Tax Topics - Income Tax Act - Section 2 - Subsection 2(3) - Paragraph 2(3)(b) incidental business activities in jurisdiction may not constitute carrying on business there 51
Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Business-Income Tax NY franchise tax qualified as an income tax only if it was not based on non-income specified minimums 238

Paragraph 126(9)(a)

Administrative Policy

18 February 2003 Internal T.I. 2003-0182997 F - Calcul du revenu net étranger à 126(1)b)(i)

In finding that the s. 110(1)(d) deduction is not to be taken into account in computing net foreign income under s. 126(1)(b)(i), the Directorate...

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