Jobs and Economic Growth Act (S.C. 2010, c. 12)
Full Document:
Assented to 2010-07-12
72. (1) The Act is amended by adding the following after section 236.4:
Marginal note:First and second variant years
236.5 (1) For the purposes of this section, a fiscal year of a network seller in respect of which an approval granted under 178(5) is in effect is
(a) the first variant year of the network seller if the network seller
(i) fails to meet the condition referred to in paragraph 178(2)(c) in respect of the fiscal year, and
(ii) meets the condition referred to in paragraph 178(2)(c) for each fiscal year of the network seller, in respect of which an approval granted under 178(5) is in effect, preceding the fiscal year; and
(b) the second variant year of the network seller if
(i) the fiscal year is after the first variant year of the network seller,
(ii) the network seller fails to meet the condition referred to in paragraph 178(2)(c) in respect of the fiscal year, and
(iii) the network seller meets the condition referred to in paragraph 178(2)(c) for each fiscal year (other than the first variant year) of the network seller, in respect of which an approval granted under 178(5) is in effect, preceding the fiscal year.
Marginal note:Adjustment by network seller if conditions not met
(2) Subject to subsections (3) and (4), if a network seller fails to satisfy any condition referred to in paragraphs 178(2)(a) to (c) for a fiscal year of the network seller in respect of which an approval granted under subsection 178(5) is in effect and, at any time during the fiscal year, a network commission would, if this Part were read without reference to subsection 178(7), become payable by the network seller to a sales representative of the network seller as consideration for a taxable supply (other than a zero-rated supply) made in Canada by the sales representative, the network seller shall, in determining the net tax for the first reporting period of the network seller following the fiscal year, add an amount equal to interest, at the prescribed rate, on the total amount of tax that would be payable in respect of the taxable supply if tax were payable in respect of the taxable supply, computed for the period beginning on the earliest day on which consideration for the taxable supply is paid or becomes due and ending on the day on or before which the network seller is required to file a return for the reporting period that includes that earliest day.
Marginal note:No adjustment for first variant year
(3) In determining the net tax for the first reporting period of a network seller following the first variant year of the network seller, the network seller is not required to add an amount in accordance with subsection (2) if
(a) the network seller satisfies the conditions referred to in paragraphs 178(2)(a) and (b) for the first variant year and for each fiscal year, in respect of which an approval granted under subsection 178(5) is in effect, preceding the first variant year; and
(b) the network seller would meet the condition referred to in paragraph 178(2)(c) for the first variant year if the reference in that paragraph to “all or substantially all” were read as a reference to “at least 80%”.
Marginal note:No adjustment for second variant year
(4) In determining the net tax for the first reporting period of the network seller following the second variant year of the network seller, the network seller is not required to add an amount in accordance with subsection (2) if
(a) the network seller satisfies the conditions referred to in paragraphs 178(2)(a) and (b) for the second variant year and for each fiscal year, in respect of which an approval granted under subsection 178(5) is in effect, preceding the second variant year;
(b) the network seller would meet the condition referred to in paragraph 178(2)(c) for each of the first variant year and the second variant year if the reference in that paragraph to “all or substantially all” were read as a reference to “at least 80%”; and
(c) within 180 days after the beginning of the second variant year, the network seller requests in writing that the Minister revoke the approval.
Marginal note:Adjustment by network seller due to notification failure
(5) If, at any time after an approval granted under subsection 178(5) in respect of a network seller and each of its sales representatives ceases to have effect as a consequence of a revocation under subsection 178(11) or (12), a network commission would, if this Part were read without reference to subsection 178(7), become payable as consideration for a taxable supply (other than a zero-rated supply) made in Canada by a sales representative of the network seller that has not been notified, as required under paragraph 178(13)(b), of the revocation and an amount is not charged or collected as, or on account of, tax in respect of the taxable supply, the network seller shall, in determining the net tax for the particular reporting period of the network seller that includes the earliest day on which consideration for the taxable supply is paid or becomes due, add an amount equal to interest, at the prescribed rate, on the total amount of tax that would be payable in respect of the taxable supply if tax were payable in respect of the taxable supply, computed for the period beginning on that earliest day and ending on the day on or before which the network seller is required to file a return for the particular reporting period.
(2) Subsection (1) applies in respect of any fiscal year of a person that begins on or after January 1, 2010, except that, if the person makes an application in accordance with paragraph 59(2)(a) in respect of a qualifying period (as defined in paragraph 59(2)(c)), for the purposes of applying subsections 236.5(1) to (4) of the Act, as enacted by subsection (1), each reference in those subsections to “fiscal year” is to be read, in respect of a fiscal year of the person that begins in 2010, as a reference to “qualifying period”.
Marginal note:1996, c. 21, s. 66(1)
73. (1) Paragraph 238(1)(a) of the Act is replaced by the following:
(a) where the registrant’s reporting period is or would, in the absence of subsection 251(1), be the fiscal year,
(i) if the registrant is a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x), within six months after the end of the year,
(ii) if subparagraph (i) does not apply, the registrant is an individual, the fiscal year is a calendar year and, for the purposes of the Income Tax Act, the individual carried on a business in the year and the filing-due date of the individual for the year is June 15 of the following year, on or before that day, and
(iii) in any other case, within three months after the end of the year; and
Marginal note:1997, c. 10, s. 217(1)
(2) The portion of subsection 238(2.1) of the English version of the Act before paragraph (a) is replaced by the following:
Marginal note:Filing by certain selected listed financial institutions
(2.1) Despite paragraph (1)(b) and subsection (2), if a selected listed financial institution’s reporting period is a fiscal month or fiscal quarter, the financial institution shall
Marginal note:1997, c. 10, s. 217(1)
(3) Paragraph 238(2.1)(b) of the Act is replaced by the following:
(b) file a final return for the period with the Minister within six months after the end of the fiscal year in which the period ends.
(4) Subsections (1) and (3) apply in respect of reporting periods in any fiscal year that begins after September 23, 2009.
74. (1) Section 242 of the Act is amended by adding the following after subsection (2.2):
Marginal note:Request for cancellation
(2.3) If, at any time when an approval granted under subsection 178(5) in respect of a network seller (as defined in subsection 178(1)) and each of its sales representatives (as defined in that subsection) is in effect, a sales representative of the network seller would be a small supplier if the approval had been in effect at all times before that time and the sales representative files with the Minister in prescribed manner a request, in prescribed form containing prescribed information, to have the registration of the sales representative cancelled, the Minister shall cancel the registration of the sales representative.
(2) Subsection (1) is deemed to have come into force on January 1, 2010.
Marginal note:2000, c. 30, s. 77(1)
75. (1) The definition “multi-employer plan” in subsection 261.01(1) of the Act is repealed.
(2) Subsection 261.01(1) of the Act is amended by adding the following in alphabetical order:
“active member”
« participant actif »
“active member” has the meaning assigned by subsection 8500(1) of the Income Tax Regulations.
“eligible amount”
« montant admissible »
“eligible amount” of a pension entity for a claim period of the pension entity means an amount of tax, other than a recoverable amount in respect of the claim period, that
(a) became payable by the pension entity during the claim period, or was paid by the pension entity during the claim period without having become payable, in respect of a supply, importation or bringing into a participating province of property or a service that the pension entity acquired, imported or brought into the participating province, as the case may be, for consumption, use or supply in respect of a pension plan, other than an amount of tax that
(i) is deemed to have been paid by the pension entity under this Part (other than section 191),
(ii) became payable, or was paid without having become payable, by the pension entity at a time when it was entitled to claim a rebate under section 259,
(iii) was payable under subsection 165(1), or is deemed under section 191 to have been paid, by the pension entity in respect of a taxable supply to the pension entity of a residential complex, an addition to a residential complex or land if, in respect of that supply, the pension entity was entitled to claim a rebate under section 256.2 or would be so entitled after paying the tax payable in respect of that supply, or
(iv) if the pension entity is a selected listed financial institution throughout the claim period, was payable under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1; or
(b) is deemed to have been paid by the pension entity under section 172.1 during the claim period.
“non-qualifying pension entity”
« entité de gestion non admissible »
“non-qualifying pension entity” means a pension entity that is not a qualifying pension entity.
“participating employer”
« employeur participant »
“participating employer” has the meaning assigned by subsection 172.1(1).
“pension contribution”
« cotisation »
“pension contribution” means a contribution by a person to a pension plan that may be deducted by the person under paragraph 20(1)(q) of the Income Tax Act in computing its income.
“pension entity”
« entité de gestion »
“pension entity” has the meaning assigned by subsection 172.1(1).
“pension plan”
« régime de pension »
“pension plan” has the meaning assigned by subsection 172.1(1).
“pension rebate amount”
« montant de remboursement de pension »
“pension rebate amount” of a pension entity for a claim period of the pension entity means the amount determined by the formula
A × B
where
- A
- is 33%; and
- B
- is the total of all amounts each of which is an eligible amount of the pension entity for the claim period.
“provincial pension rebate amount”
« montant de remboursement de pension provincial »
“provincial pension rebate amount” of a pension entity for a claim period of the pension entity in a fiscal year that ends in a taxation year of the pension entity means the amount equal to
(a) if the pension entity is a selected listed financial institution throughout the claim period, the total of all amounts, each of which is determined for a participating province by the formula
A × B × C/D
where
- A
- is the pension rebate amount of the pension entity for the claim period,
- B
- is the pension entity’s percentage for the participating province for the taxation year for the purposes of C in the formula in subsection 225.2(2),
- C
- is the tax rate for the participating province, and
- D
- is the rate set out in subsection 165(1); and
(b) in any other case, zero.
“qualifying employer”
« employeur admissible »
“qualifying employer” of a pension plan for a calendar year means a participating employer of the pension plan that is a registrant and that
(a) if pension contributions were made to the pension plan in the immediately preceding calendar year, made pension contributions to the pension plan in that year; and
(b) in any other case, was the employer of one or more active members of the pension plan in the immediately preceding calendar year.
“qualifying pension entity”
« entité de gestion admissible »
“qualifying pension entity” means a pension entity of a pension plan other than a pension plan in respect of which
(a) listed financial institutions made 10% or more of the total pension contributions to the pension plan in the last preceding calendar year in which pension contributions were made to the pension plan; or
(b) it can reasonably be expected that listed financial institutions will make 10% or more of the total pension contributions to the pension plan in the next calendar year in which pension contributions will be required to be made to the pension plan.
“recoverable amount”
« montant recouvrable »
“recoverable amount” in respect of a claim period of a person means an amount of tax
(a) that is included in determining an input tax credit of the person for the claim period;
(b) for which it can reasonably be regarded that the person has obtained or is entitled to obtain a rebate, refund or remission under any other section of this Act or under any other Act of Parliament; or
(c) that can reasonably be regarded as having been included in an amount adjusted, refunded or credited to or in favour of the person for which a credit note referred to in subsection 232(3) has been received by the person or a debit note referred to in that subsection has been issued by the person.
“tax recovery rate”
« taux de recouvrement de taxe »
“tax recovery rate” of a person for a fiscal year of the person means the lesser of
(a) 100%; and
(b) the amount (expressed as a percentage) determined by the formula
(A + B) / C
where
- A
- is the total of all amounts, each of which is
(i) if the person is a selected listed financial institution at any time in the fiscal year, an input tax credit of the person, in respect of an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01, for a reporting period of the person included in the fiscal year, and
(ii) in any other case, an input tax credit of the person for a reporting period of the person included in the fiscal year,
- B
- is the total of all amounts, each of which is
(i) if the person is a selected listed financial institution at any time in the fiscal year, a rebate to which the person is entitled under section 259, in respect of an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01, for a claim period of the person included in the fiscal year, and
(ii) in any other case, a rebate to which the person is entitled under section 259 for a claim period of the person included in the fiscal year, and
- C
- is the total of all amounts, each of which is
(i) if the person is a selected listed financial institution at any time in the fiscal year, an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01 that became payable, or was paid without having become payable, by the person during the fiscal year, and
(ii) in any other case, an amount of tax that became payable, or was paid without having become payable, by the person during the fiscal year.
Marginal note:2000, c. 30, s. 77(1); 2001, c. 15, s. 17(1)
(3) Subsections 261.01(2) to (5) of the Act are replaced by the following:
Marginal note:Rebate for qualifying pension entities
(2) If a pension entity is a qualifying pension entity on the last day of a claim period of the pension entity, the Minister shall pay a rebate to the pension entity for the claim period equal to the amount determined by the formula
A – B
where
- A
- is the pension rebate amount of the pension entity for the claim period; and
- B
- is the total of all amounts, each of which is an amount
(a) determined by the formula
C × D
where
- C
- is an amount determined for A in the formula in subsection (5) for a qualifying employer as a consequence of an election made under that subsection for the claim period, and
- D
- is the percentage specified for the qualifying employer in the election, or
(b) determined under paragraph (6)(a) in respect of a qualifying employer as a consequence of an election made under subsection (6) for the claim period.
Marginal note:Application for rebate
(3) A rebate under subsection (2) shall not be paid for a claim period of a pension entity, unless the pension entity files an application for the rebate within two years after the day that is
(a) if the pension entity is a registrant, the day on or before which the pension entity is required to file a return under Division V for the claim period; and
(b) in any other case, the last day of the claim period.
Marginal note:Limitation
(4) A pension entity shall not make more than one application for a rebate under subsection (2) for any claim period of the pension entity.
Marginal note:Election to share rebate — engaged exclusively in commercial activities
(5) If a pension entity of a pension plan is a qualifying pension entity on the last day of a claim period of the pension entity, the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan and each of those qualifying employers is engaged exclusively in commercial activities throughout the claim period, each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister an amount determined by the formula
(A + B) × C
where
- A
- is the pension rebate amount of the pension entity for the claim period;
- B
- is the provincial pension rebate amount of the pension entity for the claim period; and
- C
- is the percentage specified for the qualifying employer in the election.
Marginal note:Election to share rebate — not engaged exclusively in commercial activities
(6) If a pension entity of a pension plan is a qualifying pension entity on the last day of a claim period of the pension entity, the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan and any of those qualifying employers is not engaged exclusively in commercial activities throughout the claim period, the following rules apply:
(a) an amount (in this subsection referred to as a “shared portion”) shall be determined for the purposes of this section in respect of each of those qualifying employers by the formula
A × B × C
where
- A
- is the pension rebate amount of the pension entity for the claim period,
- B
- is the percentage specified for the qualifying employer in the election, and
- C
- is
(i) in the case where pension contributions were made to the pension plan in the calendar year that immediately precedes the calendar year that includes the last day of the claim period (in this paragraph referred to as the “preceding calendar year”), the amount determined by the formula
D/E
where
- D
- is the total of all amounts, each of which is a pension contribution made by the qualifying employer to the pension plan in the preceding calendar year, and
- E
- is the total of all amounts, each of which is a pension contribution made to the pension plan in the preceding calendar year,
(ii) in the case where subparagraph (i) does not apply and one or more qualifying employers of the pension plan was the employer of one or more active members of the pension plan in the preceding calendar year, the amount determined by the formula
F/G
where
- F
- is the total number of employees of the qualifying employer in the preceding calendar year who were active members of the pension plan in that year, and
- G
- is the sum of the total number of employees of each of those qualifying employers in the preceding calendar year who were active members of the pension plan in that year, and
(iii) in any other case, zero; and
(b) each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister an amount determined by the formula
(A + B) × C
where
- A
- is the shared portion in respect of the qualifying employer as determined under paragraph (a),
- B
- is the amount determined by the formula
D × E × F
where
- D
- is the provincial pension rebate amount of the pension entity for the claim period,
- E
- is the percentage specified for the qualifying employer in the election, and
- F
- is the amount determined for C in the formula in paragraph (a), and
- C
- is the tax recovery rate of the qualifying employer for the fiscal year of the qualifying employer that ended on or before the last day of the claim period.
Marginal note:Engaged exclusively in commercial activities
(7) For the purposes of subsections (5) and (6), a qualifying employer of a pension plan is engaged exclusively in commercial activities throughout a claim period of a pension entity of the pension plan if
(a) in the case of a qualifying employer that is a financial institution at any time in the claim period, all of the activities of the qualifying employer for the claim period are commercial activities; and
(b) in any other case, all or substantially all of the activities of the qualifying employer for the claim period are commercial activities.
Marginal note:Form and manner of filing
(8) An election made under subsection (5) or (6) by a pension entity of a pension plan and the qualifying employers of the pension plan shall
(a) be made in prescribed form containing prescribed information;
(b) be filed by the pension entity with the Minister in prescribed manner at the same time the application for the rebate under subsection (2) for the claim period is filed by the pension entity;
(c) in the case of an election under subsection (5), indicate the percentage specified for each qualifying employer, the total of which for all qualifying employers shall not exceed 100%; and
(d) in the case of an election under subsection (6), indicate for each qualifying employer the percentage specified for the qualifying employer, which shall not exceed 100%.
Marginal note:Non-qualifying pension entities
(9) If a pension entity of a pension plan is a non-qualifying pension entity on the last day of a claim period of the pension entity and the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan, each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister the amount determined by the formula
(A + B) × C × D
where
- A
- is the pension rebate amount of the pension entity for the claim period;
- B
- is the provincial pension rebate amount of the pension entity for the claim period;
- C
- is
(a) in the case where pension contributions were made to the pension plan in the calendar year (in this subsection referred to as the “preceding calendar year”) that immediately precedes the calendar year that includes the last day of the claim period, the amount determined by the formula
E/F
where
- E
- is the total of all amounts, each of which is a pension contribution made by the qualifying employer to the pension plan in the preceding calendar year, and
- F
- is the total of all amounts, each of which is a pension contribution made to the pension plan in the preceding calendar year,
(b) in the case where subparagraph (a) does not apply and one or more qualifying employers of the pension plan was the employer of one or more active members of the pension plan in the preceding calendar year, the amount determined by the formula
G/H
where
- G
- is the total number of employees of the qualifying employer in the preceding calendar year who were active members of the pension plan in that year, and
- H
- is the sum of the total number of employees of each of those qualifying employers in the preceding calendar year who were active members of the pension plan in that year, and
(c) in any other case, zero; and
- D
- is the tax recovery rate of the qualifying employer for the fiscal year of the qualifying employer that ended on or before the last day of the claim period.
Marginal note:Form and manner of filing
(10) An election made under subsection (9) for a claim period of a pension entity shall
(a) be made in prescribed form containing prescribed information; and
(b) be filed by the pension entity with the Minister in prescribed manner within two years after the day that is
(i) if the pension entity is a registrant, the day on or before which the pension entity is required to file a return under Division V for the claim period, and
(ii) in any other case, the last day of the claim period.
Marginal note:Limitation
(11) Not more than one election under subsection (9) shall be filed for a claim period of a pension entity.
Marginal note:Joint and several liability
(12) If, in determining the net tax for a reporting period of a qualifying employer of a pension plan, the qualifying employer deducts an amount under subsection (5), paragraph (6)(b) or subsection (9) and either the qualifying employer or the pension entity of the pension plan knows or ought to know that the qualifying employer is not entitled to the amount or that the amount exceeds the amount to which the qualifying employer is entitled, the qualifying employer and the pension entity are jointly and severally, or solidarily, liable to pay the amount or excess to the Receiver General.
(4) Subsections (1) to (3) apply in respect of any claim period of a pension entity beginning on or after September 23, 2009, except that for the purposes of determining a provincial pension rebate amount of a pension entity for a claim period of the pension entity that begins before July 1, 2010 and ends on or after that day, the formula in paragraph (a) of the definition “provincial pension rebate amount” in subsection 261.01(1) of the Act and the descriptions in that formula, as enacted by subsection (2), shall be read as follows:
A × B × C/D x (E – F)/E
where
- A
- is the pension rebate amount of the pension entity for the claim period,
- B
- is the pension entity’s percentage for the participating province for the taxation year for the purposes of C in the formula in subsection 225.2(2),
- C
- is the tax rate for the participating province,
- D
- is the rate set out in subsection 165(1),
- E
- is the number of days in the claim period, and
- F
- is
(i) if the participating province is Ontario or British Columbia, the number of days in the claim period that are before July 1, 2010, and
(ii) in any other case, zero; and
- Date modified: