| 19(1) | File No. 5-9353 |
| R.B. Day | |
| (613) 957-2136 |
February 5, 1990
Dear 19(1)
We are writing in reply to your letter of December 22, 1989, wherein you requested that we confirm your understanding that, pursuant to paragraph 149(1)(c) of the Income Tax Act, interest earned by a municipality on the investment of its long term disability account would not be subject to tax.
Our Comments
On the assumption that the municipality in question is, in fact, a Canadian municipality incorporated as such under relevant legislation of a particular province, it is our opinion that the municipality would not be taxable on its interest income by virtue of paragraph 149(1)(c).
The above comments are based on the limited information set out in your letter and as such, do not constitute an advance income tax ruling binding upon the Department.
Yours truly,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislation and Intergovernmental Affairs Branch