Income Tax Severed Letters - 2025-08-27

Technical Interpretation - External

8 July 2025 External T.I. 2024-1037801E5 - Ontario Made Manufacturing Investment Tax Credit

Unedited CRA Tags
97.2 Ontario Taxation Act; 1100(1)(a.1), 1101(5b.1), 1104(2) Income Tax Regulations

Principal Issues: Various questions on the application of the OMMITC and other issues related to the definition of Manufacturing and Processing (“M&P”)
1. If the property is leased to the manufacturing corporation by a holding corporation, which corporation is eligible for the OMMITC?
2. Are the front office, warehouse and other facilities included in the 90% M&P floor space requirement?
3. Is a building addition or improvement to an existing building in respect of which the OMMITC was claimed in a previous year eligible for the OMMITC in a following year?
4. Can CRA provide any further guidance on the appraisal of land for the determination of the rental cost, for purposes of computing M&P profits?

Position: 1. The qualifying corporation that owns the building.
2. Question of fact.
3. No.
4. The split between land and building should be made on a reasonable basis.

19 March 2025 External T.I. 2024-1043781E5 - Withholding on payment to non-resident employees

Unedited CRA Tags
115(2)(e)(i) and 153(1) of the Income Tax Act; 101, 102-103.1, 104(2) and 200(1) of the Income Tax Regulations
Summary Under
Tax Topics - Income Tax Regulations - Regulation 104 - Subsection 104(2)
a Canadian employer had no source deductions obligations when a resident employee emigrated to another taxing country and performed his duties remotely

Principal Issues: Does a resident employer have to withhold tax on salary paid to a non-resident employee where the duties of employment are performed outside Canada and the remuneration is taxed in the other country?

Position: No.

Reasons: Subsection 104(2) of the Regulations provides that withholding is not required where duties of employment are performed outside Canada by a non-resident employee and the payment is subject to tax in the country of residence.

28 June 2024 External T.I. 2023-1000081E5 - Paragraph 150(1.2)(b) and GICs

Unedited CRA Tags
150(1.2), 204.2

Principal Issues: Whether Guaranteed Investment Certificates (“GICs”) issued by a Canadian bank or trust company are assets listed in paragraph 150(1.2)(b)?

Position: No.

Reasons: GIC issued by a Canadian bank or trust company does not meet the description of any of the assets listed in paragraph 150(1.2)(b). Therefore, if a particular trust holds a GIC issued by a Canadian bank or trust company, it would not be a trust described in paragraph 150(1.2)(b).

16 May 2024 External T.I. 2023-0986981E5 - Reg 204.2 for trusts that wind up in 2023

Unedited CRA Tags
Reg 204.2
Summary Under
Tax Topics - Income Tax Regulations - Regulation 204.2 - Subsection 204.2(1)
Reg. 204.2(1) reporting applies to an inter vivos trust that was wound up in 2023
Summary Under
Tax Topics - Income Tax Act - Section 249.1 - Subsection 249.1(1) - Paragraph 249.1(1)(c)
an inter vivos trust that is wound up in the year nonetheless has a December 31 taxation year end

Principal Issues: Is a trust, other than a GRE, required to provide the additional information outlined in subsection 204.2(1) of the Regulations if it has been wound up between January 1, 2023 and December 30, 2023?

Position: Yes.

Reasons: The law. See below.

Technical Interpretation - Internal

4 July 2025 Internal T.I. 2025-1054791I7 F - Provincial allocation - CEWS

Unedited CRA Tags
Subsections 124(1), 124(4), 125.7(1) and 125.7(3); subsections 400(1) and 402(3) Regulations
Summary Under
Tax Topics - Income Tax Regulations - Regulation 402 - Subsection 402(3)
CEWS is excluded from gross revenue and wages for Reg. 402(3) purposes
Summary Under
Tax Topics - Income Tax Regulations - Regulation 402 - Subsection 402(3)
gross revenue does not include government assistance re expenses

Principal Issues: Where a corporation has permanent establishments in multiple provinces, whether the Canada Emergency Wage Subsidy (“CEWS”) is included in the calculation of “gross revenue” for purposes of subsection 402(3) of the Income Tax Regulations?

Position: No.

Reasons: The law and previous positions.