| 5-9212 | |
| J.P. Dunn | |
| (613)957-8961 |
Dear Sir:
We are writing in response to your correspondence of December 7, 1989 concerning certain aspects of the proposed Part I.3 Tax on Large Corporations as that draft legislation applies to credit unions. We apologize for the delay.
More particularly, your concern is with the definition of the capital of a financial institution as provided in draft subsection 181.3(3) of the Income Tax Act which includes in that determination, in the case of a financial institution incorporated without share capital, the amount of its members' contributions. It is our opinion that, in the case of a credit union, the reference to "members contributions" includes all of the contributions by members and, in the particular case quoted by you, would include both the permanent share capital required for membership plus the additional share deposits.
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 and those published by the Department of Finance in July 1990. Further, while we trust that our comments are of assistance to you, they do not constitute and 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