An Act respecting the interpretation of Canada’s international conventions relating to income tax and the Acts implementing those conventionsIncome Tax Conventions Interpretation ActIncome Tax Conventions Interpretation201301
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I-4SHORT TITLEShort titleThis Act may be cited as the Income Tax Conventions Interpretation Act.
1984, c. 48, s. 1.
DEFINITIONDefinition of “convention”In this Act, convention means any convention or agreement between Canada and another state relating to tax on income, and includes any protocol or supplementary convention or agreement relating thereto.
1984, c. 48, s. 2.
INTERPRETATIONMeaning of undefined termsNotwithstanding the provisions of a convention or the Act giving the convention the force of law in Canada, it is hereby declared that the law of Canada is that, to the extent that a term in the convention isnot defined in the convention,not fully defined in the convention, orto be defined by reference to the laws of Canada,that term has, except to the extent that the context otherwise requires, the meaning it has for the purposes of the Income Tax Act, as amended from time to time, and not the meaning it had for the purposes of the Income Tax Act on the date the convention was entered into or given the force of law in Canada if, after that date, its meaning for the purposes of the Income Tax Act has changed.
1984, c. 48, s. 3.
Permanent establishments in CanadaNotwithstanding the provisions of a convention or the Act giving the convention the force of law in Canada, it is hereby declared that the law of Canada is that where, for the purposes of the application of the convention, the profits from a business activity, including an industrial or commercial activity, attributable or allocable to a permanent establishment in Canada are to be determined for any period,there shall, except where the convention expressly otherwise provides, be included in the determination of those profits all amounts with respect to that activity that are attributable or allocable to the permanent establishment and that would be required to be included under the Income Tax Act, as amended from time to time, by a person resident in Canada carrying on the activity in Canada in the computation of his income from a business for that period; andthere shall, except to the extent that an agreement between the competent authorities of the parties to the convention expressly otherwise provides, not be deducted in the determination of those profits any amount with respect to that activity that is attributable or allocable to the permanent establishment and that would not be deductible under the Income Tax Act, as amended from time to time, by a person resident in Canada carrying on the activity in Canada in the computation of his income from a business for that period.
1984, c. 48, s. 4.
Application of section 245 of the Income Tax ActNotwithstanding the provisions of a convention or the Act giving the convention the force of law in Canada, it is hereby declared that the law of Canada is that section 245 of the Income Tax Act applies to any benefit provided under the convention.
2005, c. 19, s. 60.
Stock exchangesNotwithstanding the provisions of a convention or the Act giving the convention the force of law in Canada, each reference in a convention to a stock exchange that is prescribed under, or for the purposes of, the Income Tax Act shall be read as a reference to a designated stock exchange, as defined in the Income Tax Act.
2007, c. 35, s. 70.
DefinitionsNotwithstanding the provisions of a convention or the Act giving the convention the force of law in Canada, in this section and in the convention,annuityrenteannuity does not include any pension payment or any payment under a plan, arrangement or contract described in subparagraphs (a)(i) to (ix) of the definition “pension”;CanadaCanadaCanada means the territory of Canada, and includesevery area beyond the territorial seas of Canada that, in accordance with international law and the laws of Canada, is an area in respect of which Canada may exercise rights with respect to the seabed and subsoil and their natural resources, andthe seas and airspace above every area described in paragraph (a);immovable property and real propertybiens immobiliers et biens immeublesimmovable property and real property, with respect to property in Canada, are hereby declared to includeany right to explore for or exploit mineral deposits and sources in Canada and other natural resources in Canada, andany right to an amount computed by reference to the production, including profit, from, or to the value of production from, mineral deposits and sources in Canada and other natural resources in Canada;pensionpensionpension means, in respect of payments that arise in Canada,if the convention does not include a definition “pension”, a payment under any plan, arrangement or contract that isa registered pension plan,a registered retirement savings plan,a registered retirement income fund,a retirement compensation arrangement,a deferred profit sharing plan,a plan that is deemed by subsection 147(15) of the Income Tax Act not to be a deferred profit sharing plan,an annuity contract purchased under a plan referred to in subparagraph (v) or (vi),an annuity contract where the amount paid by or on behalf of an individual to acquire the contract was deductible under paragraph 60(l) of the Income Tax Act in computing the individual’s income for any taxation year (or would have been so deductible if the individual had been resident in Canada), ora superannuation, pension or retirement plan not otherwise referred to in this paragraph, andif the convention includes a definition “pension”, a payment that is a pension for the purposes of the convention or a payment (other than a payment of social security benefits) that would be a periodic pension payment if the convention did not include a definition “pension”;periodic pension paymentpaiement périodique de pensionperiodic pension payment means, in respect of payments that arise in Canada, a pension payment other thana lump sum payment, or a payment that can reasonably be considered to be an instalment of a lump sum amount, under a registered pension plan,a payment before maturity, or a payment in full or partial commutation of the retirement income, under a registered retirement savings plan,a payment at any time in a calendar year under a registered retirement income fund, where the total of all payments (other than the specified portion of each such payment) made under the fund at or before that time and in the year exceeds the total ofthe amount that would be the greater oftwice the amount that, if the value of C in the definition “minimum amount” in subsection 146.3(1) of the Income Tax Act were nil, would be the minimum amount under the fund for the year, and10% of the fair market value of the property (other than annuity contracts that, at the beginning of the year, are not described in paragraph (b.1) of the definition “qualified investment” in subsection 146.3(1) of the Income Tax Act) held in connection with the fund at the beginning of the yearif all property transferred in the year and before that time to the carrier of the fund as consideration for the carrier’s undertaking to make payments under the fund had been so transferred immediately before the beginning of the year and if the definition “minimum amount” in subsection 146.3(1) of the Income Tax Act applied with respect to all registered retirement income funds, andthe total of all amounts each of which is an annual or more frequent periodic payment under an annuity contract that is a qualified investment, as defined in subsection 146.3(1) of the Income Tax Act, (other than an annuity contract the fair market value of which is taken into account under clause (i)(B)) held by a trust governed by the fund that was paid into the trust in the year and before that time, ora payment to a recipient at any time in a calendar year under an arrangement, other than a plan or fund referred to in paragraphs (a) to (c), wherethe payment is notone of a series of annual or more frequent payments to be made over the lifetime of the recipient or over a period of at least 10 years,one of a series of annual or more frequent payments each of which is contingent on the recipient continuing to suffer from a physical or mental impairment, ora payment to which the recipient is entitled as a consequence of the death of an individual who was in receipt of periodic pension payments under the arrangement, and that is made under a guarantee that a minimum number of payments will be made in respect of the individual, orat the time the payment is made, it can reasonably be concluded thatthe total amount of payments (other than excluded payments) under the arrangement to the recipient in the year will exceed twice the total amount of payments (other than excluded payments) made under the arrangement to the recipient in the immediately preceding year, otherwise than because of the fact that payments commenced to be made to the recipient in the preceding year and were made for a period of less than twelve months in that year, orthe total amount of payments (other than excluded payments) under the arrangement to the recipient in the year will exceed twice the total amount of payments (other than excluded payments) to be made under the arrangement to the recipient in any subsequent year, otherwise than because of the termination of the series of payments or the reduction in the amount of payments to be made after the death of any individual,and, for the purposes of this subparagraph, “excluded payment” means a payment that is neither a periodic payment nor a payment described in any of clauses (i)(A) to (C).
R.S., 1985, c. I-4, s. 5;
1993, c. 24, s. 147;
1998, c. 19, s. 286;
1999, c. 22, s. 84.
[Repealed, 1999, c. 22, s. 85]Definition of “specified portion”For the purpose of the definition “periodic pension payment” in section 5, the specified portion of a payment means the total ofthe portion of the payment that is not required by section 146.3 of the Income Tax Act to be included in computing the income of any person and that is not included under paragraph 212(1)(q) of that Act in respect of any person; andthe portion of the payment in respect of which a deduction is available under paragraph 60(l) of the Income Tax Act in computing the income of any person.
1993, c. 24, s. 148;
1998, c. 19, s. 287;
1999, c. 22, s. 85.
Meaning of “interest”Notwithstanding section 3, the meaning of the term interest in any convention given the force of law in Canada before November 19, 1974 does not include any amount paid or credited, pursuant to an agreement in writing entered into before June 23, 1983, as consideration for a guarantee referred to in paragraph 214(15)(a) of the Income Tax Act.
1984, c. 48, s. 6.
TransitionalWhere a taxation year of a taxpayer includes June 23, 1983, the additional tax payable under the Income Tax Act (except Part XIII thereof) by the taxpayer for the taxation year by virtue of this Act shall be calculated in accordance with the following formula:A = T × (B/C)whereAis the amount of additional taxes payable under the Income Tax Act (except Part XIII thereof) by the taxpayer for the taxation year by virtue of this Act,Tis the amount of additional taxes payable under the Income Tax Act (except Part XIII thereof) by the taxpayer for the taxation year by virtue of this Act (except this section),Bis the number of days in the taxation year after June 23, 1983, andCis the number of days in the taxation year.
R.S., 1985, c. 48 (1st Supp.), s. 2.
PartnershipsNotwithstanding the provisions of a convention between Canada and another state or the Act giving it the force of law in Canada, it is hereby declared that the law of Canada is that, for the purposes of the application of the convention and the Income Tax Act to a person who is a resident of Canada, a partnership of which that person is a member is neither a resident nor an enterprise of that other state.
1991, c. 49, s. 220.
Gains arising in CanadaExcept where a convention expressly otherwise provides, any amount of income, gain or loss in respect of the disposition of a property that is taxable Canadian property within the meaning assigned by the Income Tax Act is deemed to arise in Canada.
1999, c. 22, s. 86.
APPLICATIONApplicationThis Act appliesin the case of tax under Part XIII of the Income Tax Act, to amounts paid or credited after June 23, 1983; andin all other cases, to taxation years ending after June 23, 1983.
1984, c. 48, s. 7.
RELATED PROVISIONS
— R.S., 1985, c. 48 (1st Supp.), s. 2(2)Subsection (1) is applicable to taxation years ending after June 23, 1983.
— 1991, c. 49, s. 220(2)Subsection (1) is applicable to taxation years ending after June 23, 1983.
— 1993, c. 24, s. 147(2)Subsection (1) applies with respect to amounts paid after 1991.
— 1993, c. 24, s. 148(2)Subsection (1) applies with respect to amounts paid after 1991.
— 1998, c. 19, s. 286(2)Subsection (1) applies to amounts paid after 1997.
— 1998, c. 19, s. 287(2)Subsection (1) applies to amounts paid after 1997.
— 1999, c. 22, s. 84(4)Subsections (1) to (3) apply with respect to amounts paid after 1996.
— 1999, c. 22, s. 85(2)Subsection (1) applies with respect to amounts paid after 1996.
— 1999, c. 22, s. 86(2)Subsection (1) applies to dispositions that occur after February 23, 1998.
— 2005, c. 19, s. 60(2)Subsection (1) applies with respect to transactions entered into after September 12, 1988.