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Unformatted text preview: cal explanation, the Cra released a technical interpretation.36 This document confirms that dividends that are derived by a Canadian resident from its us operating subsidiaries and paid by the Canadian resident to a us holding company are derived in connection with the us trade or business. This interpretation appears to demonstrate that the Cra supports the broad interpretation of dividend income derived in connection with a trade or business that was alluded to in the technical explanation.
The facts included in the technical interpretation are as follows:
Euco is a corporation resident in a country within the European union and owns all of the shares of us Holdco.
n us Holdco owns all of the shares of a Canadian corporation (CanuLC) and some shares of another ordinary us-resident corporation (usco).
n CanuLC is an ordinary Canadian-resident company for Canadian income tax purposes and is a disregarded entity for us tax purposes.
n CanuLC owns the remainder of the shares of usco and has no other source of income.
n 34 ibid. 35 see, for example, the technical explanation to the...
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