Cases
Transocean Offshore Ltd. v. Canada, 2005 DTC 5201, 2005 FCA 104
Lump-sum damages received by the non-resident taxpayer from Canadian residents for the repudiation, prior to the slated operational commencement...
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| Tax Topics - General Concepts - Onus | no onus to rebut a factual assmption re something not within the taxpayer's purview | 170 |
The Queen v. Immobiliare Canada Ltd., 77 DTC 5332, [1977] CTC 481 (FCTD)
A Canadian subsidiary ("Place Victoria") of a non-resident corporation ("SGI") decided in 1966 with the approval of SGI and the other...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(b) | sale proceeds allocable to expectancy of interest were not interest receipt | 198 |
| Tax Topics - Income Tax Act - Section 246 - Subsection 246(1) | elimination of Part XIII tax was a s. 246(1) benefit | 91 |
| Tax Topics - Income Tax Act - Section 76 | 105 |
See Also
Richard Lewin Re: The J.J. Herbert Family Trust #1 v. The Queen, 2011 DTC 1354 [at at 1979], 2011 TCC 476, aff'd 2013 DTC 5006 [at 5525], 2012 FCA 279 [but overridden by s. 214(3)(f)(i)(C)]
The taxpayer was a trustee for a family trust, which received a dividend in 2001 of over $2 million. The trust adopted an unconditional...
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| Tax Topics - Income Tax Act - Section 227 - Subsection 227(5) | 167 | |
| Tax Topics - Statutory Interpretation - Expressio Unius est Exclusio Alterius | 144 |
La Compagnie Minière Québec Cartier v. M.N.R., 84 DTC 1348, [1984] CTC 2408 (TCC)
The taxpayer received demand loans from its U.S. parent which provided for the semi-annual payment of interest but provided that the taxpayer, on...
Administrative Policy
17 May 2022 IFA Roundtable Q. 2, 2022-0926461C6 - Royalty Apportionment 212(1)(d)(vi)
Is CRA is bound for Part XIII tax purposes by the apportionment of a royalty payment between copyright (exempted under s. 212(1)(d)(vi)) and...
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| Tax Topics - 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” | 208 |
19 November 2019 Roundtable, 2019-0829611C6 - TEI 2019 Conference Question E1- Pays or Credits
In response to questions as to how a Canadian corporation may recover Part XIII tax that it has withheld on a dividend cheque issued to a US...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(2) | meaning of crediting a dividend | 193 |
2018 Ruling 2017-0738041R3 - XXXXXXXXXX
Investors subscribe for units of a “Fund”, both situated in and governed by the laws of a redacted non-resident jurisdiction. The units are...
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| Tax Topics - Income Tax Act - Section 104 - Subsection 104(1) | a foreign collective investment vehicle is fiscally transparent rather than a unit trust | 524 |
14 July 2015 External T.I. 2013-0499621E5 - Paragraph 212(1)(d) and Credited
A royalty charged by a U.S. resident (the "Licensor") to a corporation resident in Canada (the "Taxpayer") was, in lieu of payment by the Taxpayer...
10 March 2015 Internal T.I. 2015-0574291I7 - XXXXXXXXXX Termination Payment
A property was leased by LP to Canco for use in Canada, with LP's interest subsequently being acquired by Forco. The relevant "Master Agreement"...
17 May 2012 IFA Roundtable Q. 2, 2012-0444051C6 - 2012 IFA Seminar - Q.2 Reduced Tax Withholdings
In response to a request for confirmation that taxpayers should not be subject to assessment for under-withholding if the applicable forms (NR301,...
27 August 2012 External T.I. 2011-0416181E5 - US internet publisher - CDN resident advertiser
A US website publisher enters into an arrangement with an independent Canadian-resident promoter (the "Promoter") under which the Promoter will...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | clicks fees to website | 156 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(iii) | 345 | |
| Tax Topics - Treaties - Income Tax Conventions - Article 12 | per-click fees paid to US website publisher were for its services in uploading ads and were not Treaty royalties | 180 |
Information Circular IC76-12R8 Applicable rate of part XIII tax on amounts paid or credited to persons in countries with which Canada has a tax convention
Due diligence requirements re payers
¶ 20. If a payer witholds Part XIII tax based on the information the non-resident payee provided on forms...
21 April 2008 Internal T.I. 2007-0251761I7 F - Billet à payer
Debt owing to the taxpayer following an asset sale provided that interest may be added to the principal of the debt, which is what occurred. The...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(d) | addition of unpaid interest to principal did not establish a loan of that interest or a novation of the debt – so that interest on such capitalized interest non-deductible until paid | 243 |
| Tax Topics - General Concepts - Payment & Receipt | addition of unpaid interest to principal was not a loan of money, nor a payment or crediting of interest | 159 |
Income Tax Technical News No. 14, 9 December 1998
[T]he mere recording of the payable by way of journal entry, regardless that such amounts are payable on demand and the debtor has the capacity to...
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| Tax Topics - Income Tax Act - Section 39 - Subsection 39(2) | implied novation | 120 |
| Tax Topics - Income Tax Act - Section 9 - Timing | 37 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 0 |
12 June 1996 External T.I. 9619795 - MEANING OF "PAID OR CREDITED"
"An amount is 'credited' where a resident of Canada has set aside and made unconditionally available to the non-resident creditor an amount due to...
5 January 1996 CTF Roundtable Q. 31, 9523976 - GROSS-UP PAYMENTS
Where a gross-up is paid or credited by a Canadian resident to a non-resident pursuant to a loan agreement that is not otherwise exempt from...
27 October 1995 External T.I. 9516265 - EPSP - NON-RESIDENT BENEFICIARIES
The deemed receipt of dividends under s. 144(8) does not cause such amounts to be paid or credited for purposes of Part XIII of the Act.
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| Tax Topics - Income Tax Act - Section 144 - Subsection 144(7) | 44 | |
| Tax Topics - Income Tax Act - Section 144 - Subsection 144(8) | 27 |
26 April 1995 External T.I. 9502165 - SYSTEMS/OPERATING SOFTWARE
"In a situation where the systems/operating software is sold in a manner that is similar to the sale of shrink-wrap computer software and is sold...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | 79 |
17 October 1994 External T.I. 9418075 - WITHHOLDING TAX
"Where a financial institution credits the interest earned on a compound interest investment to a non-resident person's investment account...
15 April 1994 External T.I. 9402905 - WITHOLDING TAX EXEMPTION ON MEDIUM TERM DEBT
Because s. 212(1)(b) is applicable to payments in lieu of payments of interest, a participation payment may be subject to withholding tax...
91 C.R. - Q.48
Re when an amount is "credited".
19 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 22, ¶1040)
Interest on a debt owed by a Canadian resident to a non-resident is not credited merely by reason of having been accrued and reflected in the...
July 1990 Memorandum
Distributions of income of a trust from Canadian term deposits or bank accounts to the State of Israel was exempted from withholding tax on the...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(c) | 34 |
86 C.R. - Q.84
In non-arm's length situations, an amount is "credited" once journal entries have been made to record the amount in the payer's books, if no due...
84 C.R. - Q.17
RC accepts the Quebec Cartier Mining case. Thus, unless there is an amount at the non-resident's disposal, no amount will be considered to be...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) | 21 |
IC 77-16R4 "Non-Resident Income Tax", para. 5
The word "credits" covers any situation where a resident of Canada has set aside and made unconditionally available to the non-resident creditor...
Articles
Nakul Kohli, Jiani Qian, "Canadian Residents Earning Income Through Non-Resident US LLCs", Canadian Tax Focus, Vol. 12, No. 1, February 2022, p. 10
Canadian residents generally are better off investing in a portfolio that may include Canadian companies through a partnership rather than an LLC...
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| Tax Topics - Treaties - Income Tax Conventions - Article 4 | 213 |
Steve Suarez, "Canada Extends Transition Period for Treaty-Reduced Nonresident Withholding", Tax Notes International, 27 February 2012
Notes that CRA does not consider preparation of the applicable forms to relieve the payor from potential liability if it emerges that a higher...
Forms
NR301 "Declaration of Eligibility for Benefits (Reduced Tax) under a Tax Treaty for a Non-resident Taxpayer"
Part 8. Certification and...