Income Tax Severed Letters - 2023-12-26

Technical Interpretation - External

7 November 2023 External T.I. 2017-0684761E5 - Subsection 138(1) and paragraph 149(1)(l)

Unedited CRA Tags
149(1)(l) and 138(1)

Principal Issues: Whether views expressed in 2001-010706 remain valid?

Position: Yes, if the fact situation is the same.

Reasons: 138(1) deems the organization to have been carrying on an insurance business in the year for profit for the purposes of the Act, therefore, it will not qualify as a tax-exempt NPO under paragraph 149(1)(l) unless it is otherwise factually organized and operated exclusively on a cost-recovery basis for social welfare, civic improvement, or pleasure or recreation.

26 September 2023 External T.I. 2023-0984971E5 - Disposition - Shares used as loan collateral

Unedited CRA Tags
39(1), 40(1), 248(1) "disposition"
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition - Paragraph (j)
property transfer to lender as collateral generally would not entail a disposition if there was no change in the beneficial ownership

Principal Issues: Whether a disposition for tax purposes would occur at the time publicly traded shares are transferred to the Lender as collateral for a loan.

Position: Question of fact.

Reasons: Paragraph (j) in the definition of "disposition" under subsection 248(1) of the Act specifically excludes "any transfer of the property for the purpose only of securing a debt or a loan, or any transfer by a creditor for the purpose only of returning property that had been used as security for a debt or a loan" as being a disposition for tax purposes.

Technical Interpretation - Internal

13 October 2023 Internal T.I. 2019-0819351I7 - Barbados Treaty Limitation Period

Unedited CRA Tags
Canada-Barbados Tax Agreement, Articles IX and XXX(3)
Summary Under
Tax Topics - Treaties - Income Tax Conventions - Article 9
limitation period under the Canada-Barbados Treaty did not preclude CRA from making a transfer-pricing increase to the profits of the Canadian parent

Principal Issues: Does Art. IX(2) impose a limitation upon Canada's ability to reassess a Canadian corporation in respect of transactions with a Barbados International Business Company.

Position: No.

Reasons: The purpose of Art. IX(2) and (3) is to provide times limits to reassessments when both parties are entitled to the benefits of this Article.