| 24(1) | File No. 5-9529 |
| J.P. Dunn | |
| (613) 957-8961 |
19(1)
June 1, 1990
Dear Sir:
We are writing in response to your correspondence of January 30, 1990 wherein you requested an interpretation of the term "tangible property" as used in the determination of "taxable capital employed in Canada of a financial institution" pursuant to proposed paragraph 181.3(1)(a) of the Income Tax Act respecting Part I.3 Tax on Large Corporations.
In your letter you advised that you had contacted Mr. Brian Ernewein of the Department of Finance who stated that is was their interpretation that "tangible assets" consisted of fixed assets such as land, buildings, furniture and fixtures of the business and did not include such assets as cash, term deposits, accounts receivable, mortgages or notes receivable, T-bills and stocks. We can advise that we are generally in agreement with this interpretation of the term although we would also note that this list of assets should not be considered to be exhaustive of the assets to be included or excluded in the determination of "tangible property".
We would also advise that the opinions expressed above are based upon the amendments to the Income Tax Act proposed in Bill C-28 as passed by the House of Commons on December 20, 1989. Further, while we trust that our comments are of assistance to you, they do not constitute an advance income tax ruling and are, therefore, not binding upon the Department in respect of a particular situation.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate