5 October 2012 Roundtable, 2012-0451251C6 F - Excess of foreign tax withheld at source -- summary under Income-Producing Purpose

Tax is systematically withheld on income from ADRs at above the maximum rates permitted by the conventions. In addition to finding that such excess amounts would not qualify as an "income or profit tax" for s. 126 or 20(11) purposes, CRA stated that “the excess amount could not be considered as an outlay or expense made or incurred by the taxpayer to earn income from property.”