SECTION 55 – RULINGS ON THE PURPOSE TEST

Issue 442, June 2018

requesting a ruling

In a December 5, 2017 Technical Interpretation (2017-0723491C6, Ton-That, Marc), CRA reiterated that while they do not usually issue Advance Income Tax Rulings in primarily factual determinations, they will consider issuing a favourable ruling under Subsection 55(2) where circumstances support the absence of one of the purposes described in Paragraph 55(2.1)(b). CRA also reiterated a comment from 2016 which stated that other than rulings on loss consolidations, they have not been deluged by requests for rulings on this topic.

Editors’ Comment
Historically, CRA has issued rulings on matters of law, but not matters of fact. However, CRA has recently noted they are developing guidelines for incorporating questions of fact into rulings (see VTN 442(10)). It remains to be seen how, if at all, a ruling on a question of fact will differ from a ruling on a question of law.

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