1991 VANCOWER D.O. ROUNDTABLE
Question
51. Can Revenue Canada provide some guidelines regarding the sourcing of income and expenses for purposes of section 4 of the Act?
Answer
51. Presumably, the question pertains to the sourcing rules under paragraphs 4(1)(a) and (b). These paragraphs apply to determine, in the first instance, the amount of income from various sources of a taxpayer where the source of income is determined in a generic sense (paragraph (a)) and, in respect of each of the generic sources of income, to determine the geographic sources of such generic source income (paragraph (b)).
While there are IT Bulletins ( IT-256R , IT-270R2 , IT-328R2 , IT-362R and IT-377R ) which only allude to the application of section 4 in particular circumstances, the Department has not published any general guidelines on section 4. There is however much external published literature pertaining to sourcing of income and expenses under section 4, especially sourcing business income.
If there is any concern about the application of section 4 in a particular fact situation, the Rulings Directorate, Head Office would be pleased to examine a ruling request on the matter.
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