3 July 1990 Ruling 59641 F - Application of Competent Authority Agreement to Canada-U.S. Income Tax Convention

By services, 18 January, 2022
Official title
Application of Competent Authority Agreement to Canada-U.S. Income Tax Convention
Language
French
CRA tags
115.1
Document number
Citation name
59641
Severed letter type
Ruling
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
633207
Extra import data
{
"field_external_guid": [],
"field_proprietary_citation": [],
"field_release_date_new": "1990-07-03 08:00:00",
"field_tags": []
}
Main text
24(1) 5-9641
  S. Leung
  (613) 957-2116
Attention: 19(1)

July 3, 1990

Dear Sirs:

Re: Paragraph 8 of Article XIII of the Canada-U.S. Income Tax Convention and section 115.1 of the Income Tax Act (the "Act")

This is in response to your letter of February 14, 1990 wherein you requested that we reconsider the opinion expressed in our letter to you of January 24, 1990 in light of section 115.1 of the Income Tax Act (the "Act"). Our letter expressed our view as to the application of paragraph 8 of Article XIII of the Canada-U.S. Income Tax Convention (1980) (the "Convention") to the situation described in your earlier letter of September 21, 1989.

We have reviewed the provisions of section 115.1 of the Act and the Technical Notes to a Notice of Ways and Means Motion Relating to Income Tax issued by the Department of Finance on June 5, 1987 (the "Technical Notes") with respect to the enactment of that section. We are sorry that we do not concur with your observation that "the only possible circumstances to which section 115.1 could apply with respect to a partnership is paragraph 8 of Article XIII of the Canada-U.S. Income Tax Convention". In our view, section 115.1 was not enacted specifically for paragraph 8 of the Convention.  This is evidenced by the last sentence of the first paragraph on page 63 of the Technical Notes, which states as follows:

     "This new section will also accommodate similar provisions which, although not in force at this time, have been included in Canada's tax treaties with France and the Netherlands or will be included in future tax treaties".

Consequently, section 115.1 of the Act is a section which could eventually be applicable to all of Canada's tax treaties. It is, therefore, worded in a broad manner.

We have stated in our letter of January 24, 1990 two main reasons why we believe that paragraph 8 of the Convention would not apply to the situation described in your earlier letter. We do not believe that the wording used in section 115.1 offers any valid reason for us to alter our opinion on this matter.

Yours truly,

for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch