Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
will computer data cable be included in class 10 of schedule II as a result of the exception to the exclusion in 10(f)(iv)?
Position: Yes.
Reasons:
class 3 data communication equipment same as data handling equipment classc10.
S. Tevlin
XXXXXXXXXX (613)957-2093
2000-001311
Attention: XXXXXXXXXX
July 26, 2000
Dear Sir:
Re: Classification of Computer Data Cable
We are writing in response to your letter dated March 2, 2000 wherein you requested our comments regarding the proper classification of computer data cable in Schedule II to the Income Tax Regulations.
It is your position that notwithstanding the inclusion of cable in paragraph (j) of class 3 of Schedule II, electronic data-cabling associated with general-purpose electronic data processing equipment (i.e. personal computers) qualifies for class 10 categorization pursuant to the exception to the exclusion in subparagraph 10(f)(iv) of class 10.
We are of the opinion that the specialized cable that allows computers to transmit data can be categorized as data handling equipment or data communications equipment and can be considered ancillary to the general purpose computer equipment to which it is connected. As such, that cable can be included in class 10 of Schedule II pursuant to the exception to the exclusion in subparagraph 10(f)(iv) of class 10.
Class 3 of Schedule II includes property that is telephone, telegraph or data communications equipment acquired after May 25. 1976, that is a wire or cable.
As described in paragraph 6 of Interpretation Bulletin IT 285R2, since cable as data communication\handling equipment is described in both Class 3 and class 10, and both classes contain the descriptive phrase "not included in any other class", the taxpayer may choose between the two classes.
We note that "fibre optic" cable is included in class 42 of Schedule II. However, class 42 does not contain the descriptive phrase described in the preceding paragraph. As such cable classified as "fibre optic" must be included in class 42 of Schedule II.
The foregoing comments are given in accordance with the practice referred to in paragraph 21 of IC-70-6R3, and are not binding on the Canada Customs and Revenue Agency.
We trust our comments will be of assistance to you.
Yours truly,
Paul Lynch
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
...cont'd
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