| 19(1) | 5-7001 |
| D.Y. Dalphy | |
| (613) 957-2117 | |
| December 21, 1989 |
Dear Sirs:
Re: Foreign Affiliate - Change of Control
This is in reply to your letter of November 7, 1988 regarding foreign affiliates an subsection 249(4) of Income Tax Act (the Act), which is applicable with respect to acquisitions of control occurring after January 5, 1987 (other than certain "grandfathered" acquisitions).
In our view, the general words used in section 249 of the Act do not indirectly alter the specific provisions of subdivision i of Division B of the Act (which specifically deals with corporations not resident in Canada). Accordingly, we are of the opinion that the definition of "taxation year" in paragraph 95(1)(g) of the Act would, for the purposes of subdivision i, override the rules in respect of "taxation year" in section 249 of act. In sum, subsection 249(4) of the Act will not apply to foreign affiliates.
We hope this opinion will be of assistance. These comments represent our opinion of the law it applies generally. As indicated in paragraph 24 of Information Circular 70-6R dated December 18, 1978 this opinion is not a ruling and according, it is not binding of Revenue Canada, Taxation.
Yours truly,
for DirectorReorganizations and Non-Resident DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch