In 2016-0636721I7, a Canadian corporation (Canco) paid fees to existing non-resident lenders for their consent to allow the sale of shares of Canco to arm’s length purchasers.  Without this consent, the sale would put Canco into default under its existing loan agreements.  The Rulings Directorate of the Canada Revenue Agency (CRA) concluded that the fees were not subject to withholding tax in Canada, for three reasons.  First, they were not “management or administration fees” under s. 212(1)(a) because that provision contemplates amounts paid for the direction or supervision of a business (see page 6).  Second, the fees were not interest because they did not accrue day-to-day, and in any event, were paid to arm’s length lenders (such that s. 212(1)(b) could not apply, see page 7).  Third, although the fees might be described as an amount paid “to make money available” under s. 214(15)(b), any deemed interest under that provision could not be subject to withholding tax under s. 212(1)(b) because the lenders dealt at arm’s length with Canco (see page 8).