8 March 2007 Internal T.I. 2006-0214291I7 - Part XIII withholding tax -- summary under Paragraph 212(1)(b)

"Where a loan agreement provides for a gross-up of the interest payments, our position is that paragraph 18(1)(t) of the Act does not apply to the gross-up amount and that the gross-up amount may be considered as additional interest for the purposes of paragraph 212(1)(b) ... ."