16 September 1999 External T.I. 9830565 - PERIODICALS

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: does a publication that is published once a year qualify as a periodical for purposes of section 19?

Position: no

Reasons: Canadian heritage news release June 4, 1999 re:

Canada-US agreement on Periodicals sated that a periodical is defined as at least twice a year.

XXXXXXXXXX					983056
S. Tevlin
Attention:  XXXXXXXXXX

September 16, 1999

Dear Sirs:

Re: Section 19 of the Income Tax Act (the “Act”)

We are writing in response to your letter dated November 5, 1998, wherein you requested that we confirm your interpretation that a foreign owned publication that is published annually and whose advertising is directed primarily to a market in Canada would be subject to the provisions of section 19 of the Act. You have also referred to a previous interpretation provided by the Department wherein it was stated that "a periodical is a publication, other than a newspaper, the issues of which appear at regular intervals of less than a year" (Document E9220585).

Our comments

In a Canadian Heritage News Release dated June 4, 1999, it was announced that the governments of Canada and the United States have signed the Canada-US Agreement on Periodicals. Among other items, this Agreement refers to the application of section 19 of the Act. In addition, for the purposes of the Agreement, a periodical means a printed publication that appears in consecutively numbered or dated issues, published under common title, usually at regular intervals, not more than once a week, excluding special issues, and at least twice every year. In addition a periodical does not include a catalogue, a directory, a newsletter or a newspaper.

It is our view that the above meaning provided to the term periodical in the Agreement would generally be appropriate for the application of the Act, and, as such, it remains our position that a foreign owned publication that is published annually will not be considered a periodical for purposes of section 19 of the Act.

We trust our comments will be of assistance to you.

Yours truly,

Paul Lynch
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch