Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Request for information concerning application of section 19 (Limitation re advertising expense - newspapers) to a specific taxpayer.
Position TAKEN:
Specific taxpayer information is confidential. General comments provided on application of section 19.
Reasons: N/A
October 16, 2001
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your letter of July 26, 2001, in which you ask a number of questions regarding XXXXXXXXXX.
The confidentiality provisions of the Income Tax Act preclude me from releasing information from a company's file without the written consent of one of its authorized officials. The confidentiality provisions of the Act are fundamental to the integrity of our self-assessment system and the CCRA takes its responsibility of maintaining confidentiality very seriously. However, I can offer the following general comments, which may be of assistance to you.
The Act contains rules that restrict a taxpayer's ability to deduct expenses for advertising in newspapers directed at a Canadian market. In general, the advertising, in order to be deductible, must be in a newspaper that is owned 75 per cent by Canadians. In the case of a newspaper owned by a corporation, Canadians must own at least 75 per cent of the company's shares or, if it is a public company, Canadians must control the company. As well, the chairperson and at least 75 per cent of the board of directors of the corporation must be Canadian.
The role of the CCRA is to administer the Act as passed by Parliament. The CCRA is committed to applying the tax laws in a consistent and fair manner to all taxpayers based on the law in force and the CCRA does not have the discretion or right to deviate from the law.
I trust this explains the CCRA's position on this matter.
Yours sincerely,
Martin Cauchon
Terry Young 952-1506