Regulation 5907

Table of Contents

Subsection 5907(1)

Paragraph 5907(1)(l)

Administrative Policy

5 June 1996 T.I. 961803 (C.T.O. "Income or Profits Tax for Foreign Affiliate Rules")

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Earnings

Administrative Policy

14 March 2014 Internal T.I. 2013-0499141I7 - IRC 338(h)(10), "earnings" and safe income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) goodwill gains which accrued prior to purchase of FA and which were included under s. 55(5)(d) did not contributed to gain on Canco shares 286
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Exempt Earnings no carve out for goodwill gains 132
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(2) - Paragraph 5907(2)(f) "notional" deduction arising from Code s. 338(h)(10) step-up of non-purchased goodwill reversed under Reg. 5907(2)(f) rather than (b) 433

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

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20 May 2011 Roundtable, 2011-0404501C6 - computation of surplus

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5 December 2003 External T.I. 2002-0165195

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8 July 1998 T.I. 980712

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80 C.R. - Q.17

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Articles

Arda Minassian, Kara Ann Selby, "Computation of Surplus Accounts", 2002 Conference Report, (CTF), c. 43

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Paragraph (a)

Subparagraph (a)(i)

Administrative Policy

24 August 2016 External T.I. 2015-0592921E5 - Computation of Earnings of a Foreign Affiliate

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Earnings - Paragraph (a) - Subparagraph (a)(iii) branch earnings in non-designated country not computed under Singapore tax law until repatriated were computed under ITA rules 93

Articles

Michael Black, "Cross-Border Consolidation and the Foreign Affiliate Rules", Canadian Tax Journal (2017) 65:1, 173-89

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Subparagraph (a)(iii)

Administrative Policy

26 April 2017 IFA Roundtable Q. 9, 2017-0691201C6 - Computation of Earnings for LLCs

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24 August 2016 External T.I. 2015-0592921E5 - Computation of Earnings of a Foreign Affiliate

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Earnings - Paragraph (a) - Subparagraph (a)(i) a Singapore company recognizing earnings from a foreign branch only on a remittance basis could not measure its “earnings” under Singapore rules 286

29 November 2016 CTF Roundtable Q. 11, 2016-0669761C6 - Computation of Earnings for LLCs

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Articles

Paul Barnicke, Melanie Huynh, "Earnings of Disregarded US LLC", Canadian Tax Highlights, Vol. 25, No. 2, February 2017, p. 5

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Taxable surplus

Articles

Michael Black, "Cross-Border Consolidation and the Foreign Affiliate Rules", Canadian Tax Journal (2017) 65:1, 173-89

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Exempt Earnings

Administrative Policy

14 March 2014 Internal T.I. 2013-0499141I7 - IRC 338(h)(10), "earnings" and safe income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) goodwill gains which accrued prior to purchase of FA and which were included under s. 55(5)(d) did not contributed to gain on Canco shares 286
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Earnings "notional" deduction arising from Code s. 338(h)(10) step-up excluded 129
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(2) - Paragraph 5907(2)(f) "notional" deduction arising from Code s. 338(h)(10) step-up of non-purchased goodwill reversed under Reg. 5907(2)(f) rather than (b) 433

10 March 2011 External T.I. 2008-0302851E5 - Application of subsection 96(1) to capital gains

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Paragraph (d)

Subparagraph (d)(ii)

Clause (d)(ii)(A)

Subclause (d)(ii)(A)(I)

Administrative Policy

2015 Ruling 2015-0573141R3 - Subparagraph 95(2)(a)(i)

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(i) US sub servicing the collection of both its own debt portfolios and that of a U.S. sister was a good mothership to the sister 323

Exempt Surplus

Administrative Policy

23 June 1993 T.I. (Tax Window, No. 32, p. 13, ¶2608)

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15 January 1992 Memorandum (Tax Window, No. 15, p. 1, ¶1675)

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Net Earnings

Administrative Policy

21 April 2015 Internal T.I. 2014-0560811I7 - FACL carryback – Surplus & PAS election

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2) no relief for late-filed Reg. 5901(2)(b) election 50
Tax Topics - Income Tax Regulations - Regulation 5901 - Subsection 5901(2) - Paragraph 5901(2)(b) no relief for late-filed Reg. 5901(2)(b) election 164
Tax Topics - Income Tax Regulations - Regulation 5903.1 - Subsection 5903.1(1) FACL carryback from transitional year 140
Tax Topics - Income Tax Regulations - Regulation 600 no relief for late-filed Reg. 5901(2)(b) election 50

15 January 1992 Memorandum (Tax Window, No. 15, p. 2, ¶1676)

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Underlying Foreign Tax

Administrative Policy

30 October 2014 External T.I. 2013-0488881E5 - Upstream Loan

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) no double inclusion following FA creditor wind-up 54
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3) notional s. 40(3) gain does not generate surplus 59
Tax Topics - Income Tax Act - Section 90 - Subsection 90(6) no double inclusion following FA creditor wind-up or for 2nd loan in series 105
Tax Topics - Income Tax Act - Section 90 - Subsection 90(9) notional election and double taxation issues 1108
Tax Topics - Income Tax Regulations - Regulation 5901 - Subsection 5901(1.1) notional Reg. 5901(1.1) election 24
Tax Topics - Income Tax Regulations - Regulation 5901 - Subsection 5901(2) - Paragraph 5901(2)(a) 90-day rule unavailable 22
Tax Topics - Income Tax Regulations - Regulation 5901 - Subsection 5901(2) - Paragraph 5901(2)(b) notional Reg. 5901(2)(b) election 25

27 November 1998 T.I. 982283

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88 C.R. - Q.12

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Underlying Foreign Tax Applicable

Administrative Policy

3 April 2013 External T.I. 2012-0460671E5 - Disproportionate UFT election

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9 August 1991 T.I. 901185

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Subsection 5907(1.1)

Administrative Policy

22 November 1991 Memorandum (Tax Window, No. 13, p. 9, ¶1608)

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Subsection 5907(1.3)

Administrative Policy

8 April 2004 Internal T.I. 2003-0037291I7 - US LLC and Regulation 5907(1.3)

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Paragraph 5907(1.3)(a)

Articles

Michael Black, "Cross-Border Consolidation and the Foreign Affiliate Rules", Canadian Tax Journal (2017) 65:1, 173-89

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Subsection 5907(1.5)

Administrative Policy

6 February 2015 External T.I. 2014-0542281E5 - Foreign affiliate - prescribed foreign accrual tax

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Subsection 5907(1.6)

Articles

Adam Freiheit, "Reinstated Foreign Accrual Tax and the Multi-Period Perspective", Canadian Tax Journal, (2015) 63:2, 521-42, p. 521.

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Subsection 5907(2)

Paragraph 5907(2)(f)

Administrative Policy

6 May 2014 May CALU Roundtable, 2014-0523341C6 - CALU - Insurance Death Benefit received by FA

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14 March 2014 Internal T.I. 2013-0499141I7 - IRC 338(h)(10), "earnings" and safe income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) goodwill gains which accrued prior to purchase of FA and which were included under s. 55(5)(d) did not contributed to gain on Canco shares 286
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Earnings "notional" deduction arising from Code s. 338(h)(10) step-up excluded 129
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Exempt Earnings no carve out for goodwill gains 132

5 December 2003 External T.I. 2002-0165195

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Paragraph 5907(2)(j)

Administrative Policy

26 May 2016 IFA Roundtable Q. 8, 2016-0642041C6 - s. 95(2)(a)(ii)(B) and borrowing to return capital

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(ii) - Clause 95(2)(a)(ii)(B) tracing approach to determining whether interest on money borrowed to return capital is considered for s. 95(2)(a)(ii)(B) to be deductible in computing exempt earnings 470

28 May 2015 IFA Roundtable Q. 11, 2015-0581571C6 - IFA 2015 Q11: Application of clause 95(2)(a)(ii)(B)

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(ii) - Clause 95(2)(a)(ii)(B) interest on borrowing to distribute accumulated profits 238

6 March 1995 Memorandum 941221 (C.T.O. "Adjustments in the Computation of Exempt Surplus")

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93 C.M.TC - Q. 2

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20 May 1993 T.I. (Tax Window, No. 31, p. 3, ¶2509)

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22 November 1991 Memorandum (Tax Window, No. 13, p. 9, ¶1608)

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Articles

Arda Minassian, Kara Ann Selby, "Computation of Surplus Accounts", 2002 Conference Report, (CTF), c. 43

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Subsection 5907(2.01)

Administrative Policy

22 April 2015 External T.I. 2014-0550451E5 - Interpretation of paragraph 5907(2.01) of the Regulations.

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Subsection 5907(2.02)

Articles

Paul Barnicke, Melanie Huynh, "Exempt Earnings Anti-Avoidance", Canadian Tax Highlights, (Canadian Tax Foundation), Vol. 23, No. 12, December 2015, p. 5

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Jenny Li, "The Interaction of the Fresh Start and Surplus Reclassification Rules", International Tax, Wolters Kluwer CCH, April 2014, No. 75, p. 8.

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Subsection 5907(2.03)

Administrative Policy

22 January 2013 External T.I. 2012-0460121E5 - Computation of "earnings" of a foreign affiliate

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Articles

Michael W. Colborne, "Regulation 5907(2.03) and Offshore Metal Streams", Resource Sector Taxation, Volume IX, No. 2, 2013, p. 647.

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Subsection 5907(2.1)

Articles

Albert Baker, David Bunn, "FAs and the Repeal of the ECP Regime", Canadian Tax Highlights, Vol. 24, No. 9, September 2016, p. 4

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Paul Dhesi, Korinna Fehrmann, "Integration Across Borders", Canadian Tax Journal, (2015) 63:4, 1049-72

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Subsection 5907(2.6)

Administrative Policy

1 March 1991 Memorandum (Tax Window, No. 2, p. 18, ¶1185)

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Subsection 5907(2.7)

Administrative Policy

27 January 2017 External T.I. 2013-0482351E5 - Clause 95(2)(a)(ii)(D)

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(ii) - Clause 95(2)(a)(ii)(D) s. 95(2)(a)(ii)(D) can recharacterize a loan prepayment penalty as active business income 434
Tax Topics - Income Tax Act - Section 18 - Subsection 18(9.1) s. 18(9.1) applied where loan prepayment penalty was equal to PV of interest thereon 174

25 April 1995 T.I. 942987 (C.T.O. "6363-1 Foreign Affiliates Deemed ABI")

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Subsection 5907(5)

Articles

Philippe Montillaud, Grant J. Russell, "Foreign Accrual Tax and Flow-through Entities", International Tax Planning, Volume XVIII, No. 4, 2013, p. 1280

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Subsection 5907(5.1)

Subsection 5907(6)

Administrative Policy

10 October 2014 APFF Roundtable Q. 24, 2014-0538181C6 F - 2014 APFF Roundtable, Q. 24 - Surplus accounts calculation

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Brian Darling, "Revenue Canada Perspectives" in Income Tax and Goods and Services Tax Considerations in Corporate Financing, 1992 Corporate Management Tax Conference Report (Canadian Tax Foundation, 1993), 5

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Subsection 5907(10)

Administrative Policy

The Queen v. Old HW-GW Ltd., 93 DTC 5199 (FCA)

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Subsection 5907(11)

Administrative Policy

1 May 2009 CLHIA Roundtable Q. 4, 2009-0316641C6 - CLHIA Round Table Question #4 - TIEAs

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7 June 1991 T.I. (Tax Window, No. 4, p. 31, ¶1285)

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Articles

Nathan Boidman, "Canada's Two-Faced TIEAs - Netherlands Antilles Trumps Bermuda", Tax Notes International, Vol. 55, No. 12, September 21, 2009, p. 1023.

Subsection 5907(11.2)

Administrative Policy

2013 Ruling 2013-0477871R3 - 5900(1)(a) and dividends from foreign affiliate

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 90 - Subsection 90(14) repayment by set-off against dividend 87

10 November 1997 T.I. 971117

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1997 A.P.F.F. Round Table , Q. 3.5, No. 9M19020

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27 October 1997 T.I. 970470

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17 February 1997 T.I. 961753

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Locations of other summaries Wordcount
Tax Topics - Treaties - Articles of Treaties - Article 4 61

8 March 1996 T.I. 960067

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Locations of other summaries Wordcount
Tax Topics - Treaties - Articles of Treaties - Article 4 69

1996 Corporate Management Tax Conference Round Table, Q. 3

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Subsection 5907(13)

Administrative Policy

3 October 2000 External T.I. 1999-001556 -

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