Municipal or Public Body Ruling

As a pilot project, the Income Tax Rulings Directorate (ITRD) has been offering Municipal or Public Body Rulings (MPBR) to taxpayers and their authorized representatives (the Applicant). The pilot has been extended until December 31, 2017.

An MPBR allows the Applicant to obtain a ruling on whether a particular entity is considered to be a municipal or public body performing a function of government within the meaning of paragraph 149(1)(c) of the Income Tax Act without the need to set out a proposed transaction. The purpose of the MPBR is to promote voluntary compliance, uniformity and self-assessment by providing certainty with respect to the application of paragraph 149(1)(c) of the Income Tax Act. Removing the requirement for a proposed transaction also reduces red tape for municipal or public bodies.

Terms of Reference

Request

  • An Applicant must submit a request in writing in the manner set out in Information Circular 70-6R7, Advance Income Tax Rulings and Technical Interpretations (the IC). References to proposed transactions in the IC should be read with appropriate modification.
  • The fee for the MPBR will be the same as that described in the IC for other rulings. The fee will be $100 (plus GST/HST) an hour for the first 10 hours and $155 (plus GST/HST) an hour for each subsequent hour. These fees will be charged regardless of the outcome of the MPBR.

ITRD Acknowledgment

  • Requests for MPBRs will be acknowledged within two weeks of receipt. The acknowledgement will provide a contact name and reference number, and will identify any initial additional information required to process the request.

Application

  • An MPBR is provided on a forward-looking basis. The ruling will be valid in future periods as long as the particular facts on which the ruling is based continue to represent the entity’s situation. Additionally, if the facts related to the entity indicate that it was a municipal or public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) of the Income Tax Act before the date of the ruling, the issuance of the ruling does not change or invalidate the entity’s ability to claim the exemption before this date.

Form of the Ruling

An MPBR will generally use the following standard wording, although this will be modified as appropriate on a case-by-case basis:

Ruling Given – Basic Scenario

Provided that the preceding statements constitute a complete and accurate disclosure of all of the relevant facts and provided that the facts continue to describe [the entity] and describe the activities of [the entity], we rule as follows:
 

As of the date of this letter, [the entity] is considered to be a municipal or public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) of the Act and, accordingly, is exempt from tax under Part I of the Act.

The above advance income tax ruling, which is based on the Act and Regulations in their present form and does not take into account any proposed amendments thereto, is given subject to the general limitations and qualifications set out in Information Circular 70-6R7, Advance Income Tax Rulings and Technical Interpretations, dated April 22, 2016, and is binding on the Canada Revenue Agency (CRA).

This letter is based solely on the facts described above. The documentation submitted with your request does not form part of the facts and any references thereto are provided solely for the convenience of the reader.

Nothing in this advance income tax ruling should be construed as implying that we are ruling on any other issue related to [the entity].

Municipal or public bodies performing a function of government in Canada that want to be recognized as qualified donees must apply for registration with CRA. Successful registrants will be added to a public list maintained by the CRA and available on our website. As a qualified donee, the organization will be eligible to issue official donation receipts and to receive gifts from registered charities. Should your organization choose to apply, a copy of this letter should be submitted with the application. For more information on the application process, please refer to our website at http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/mncplpblcbds-eng.html.

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