CBS/Fox Co. v. Canada
T-3345-90
Rouleau J.
24/10/95
6 pp.
Appeal from assessment for 1984-Under video franchise agreement, plaintiff providing video tape reproduction masters to CBS/Fox Canada, entitling latter to duplicate those master video tapes for distribution within Canada-BS/Fox Canada paying royalties to plaintiff arising out of sale of video cassettes-During 1983, 1984 remitting 15% of gross amount of payments to Receiver General, but receiving full refund on basis royalties paid in respect of video cassettes not royalties paid in respect of "motion picture films" and exempt from withholding tax in Canada by virtue of Art. XIII C of Canada-United States Income Tax Convention, 1942-Minister then reversing position with respect to part of 1984 royalties-Income Tax Act, s. 212(5)(a) requiring non-resident to pay 25% income tax on every amount paid by resident for right in, use of, motion picture film used or reproduced in Canada-Art. XIII C exempting from tax royalties except in respect of motion picture films-Whether "motion picture film" including video cassette of motion picture film-Appeal dismissed-Provided right to motion picture film sold for purpose of using film or reproducing it in Canada, amount taxed under s. 212(5)(a)-To exclude motion picture film simply because transferred to video tape defeating Parliament's intention-Although video tape may be method of presentation, content remaining motion picture film within ordinary, commonly understood meaning of those words-Not form, but product significant and that product, though converted to video tape for presentation or exhibition on television remaining basically theatrical product produced originally for theatrical exhibition, albeit modified technically and in some dramatic aspect of exhibition by television: MCA Television Ltd. v. The Queen (1994), 94 DTC 6375 (F.C.T.D.)-Income Tax Act, S.C. 1970-71-72, c. 63, s. 212(5) (as am. by S.C. 1973-74, c. 14, s. 68; 1988, c. 55, s. 161)-Canada-United States Income Tax Convention, 1942, Art. XIII C, S.C. 1943-44, c. 21, Sch. (as am. by S.C. 1950, c. 27, s. 1).