Section 80.5

S. 80.5 deduction potentially can be accessed by non-resident carrying on business in Canada

• 2.43 Where s. 80.4(2) results in a deemed interest benefit to a non-resident borrower, s. 80.5 applies to deem the amount of the benefit to be interest paid in, and payable in respect of, the year pursuant to a legal obligation to pay interest on the borrowed money for purposes of s. 20(1)(c). Accordingly, a deduction under s. 20(1)(c) may be claimed where the proceeds of the loan were used to earn income in Canada that is taxable under Part I.