“Taxes on capital generally constitute complementary taxation of income from capital.

The existing international tax rules make sharp distinctions between the tax treatment of income from capital, labour, property and services.

The member also mentioned the problem of distinguishing between royalties akin to income from capital and payments received for services.

In principle, the amount is computed on the basis of all types of income under the Income Tax Act (including income from capital, rentals, etc.).

Even if they are determined pro rata temporis they constitute not so much income from capital as a special form of compensation for the loss suffered by the creditor through the debtor's delay in meeting his obligations.

(d) A rise in the share of forms of income derived from capital (interest, profits, rents) in total global income.

On the other hand, although it is true that instalments of purchased annuities include an interest element on the purchase capital as well as return of capital, such instalments thus constituting `fruits civils' which accrue from day to day, it would be difficult for many countries to make a distinction between the element representing income from capital and the element representing a return of capital in order merely to tax the income element under the same category as income from movable capital.

For a person selling equipment on credit, the interest is more an element of the sales price than income from invested capital.

In the case especially of the person selling equipment on credit, the interest is more an element of the selling price than income from invested capital.” [para.

(b) Income derived from Working Capital Fund investments shall be credited to miscellaneous income, as provided for in regulation 6.4.