Revenue Canada Taxation
May 19, 1983
S. Shinerock (613) 593-6937
Dear XXXX
We refer to your letter of March 15, 1983 in which you requested our views on the applicability of subsection 69(2) of the Income Tax Act (the Act) to payments made by a wholly-owned subsidiary that is a Schedule B bank to its parent that is a non-resident bank.
It is not possible to provide you with any definitive opinion on what appears to be an actual situation as described by you, since whether or not subsection 69(2) of the Act would have application depends entirely on the facts. We would point out that the provisions of subsection 18(4) of the Act could also apply if the conditions described therein were met. In addition, if the parent is not paying a reasonable remuneration to the subsidiary in respect of services provided by the subsidiary to the parent, the provisions of paragraph 15(l)(c) of the Act could be considered.
Yours truly,
for Director Specialty Corporations Rulings vision Corporate Rulings Directorate Legislation Branch